Dow jumped 206 (near the high), advancers ahead of decliners almost 4-1 & NAZ shot up 41. The Financial Index surged 5+ to 217. The MLP index rose 2+ to 400 (not seen in almost 6 months) & the REIT index shop 3+ to the 273s, a new 4 year high. Junk bond funds gained & Treasuries inched higher. Oil went up & gold had a surge (see chart below) after the big announcement.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
Big Ben Bernanke said the Federal Reserve (FED) does not have a specific economic target for its new stimulus program & will keep buying bonds until it sees more jobs, lower unemployment & stronger growth. "We are looking for on-going sustained improvement in the labor market," Bernanke said during a news conference. "There's not a specific number in mind. But what we've seen in the last six months isn't it." The FED said that it will spend $40B a month to buy mortgage bonds for as long as it deems necessary. It plans to keep short-term interest rates at record lows thru mid-2015 & it's ready to try other measures if hiring doesn't improve. The FED said “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.”
Fed Undertakes QE3 With $40 Billion MBS Purchases Per Month
Photo: Bloomberg
FED officials said economic growth will improve faster than they had earlier projected as they embarked on a 3rd round of asset purchases aimed at spurring the expansion. They upgraded the estimate for 2013 GDP growth to 2.5-3%, compared with 2 to 2.2% in Jun. Estimates for 2014 are for 3-3.8% growth, versus 3-3½% previously estmated. Officials forecasted today that unemployment will average 7.6-7.9% in Q4 2012, compared with 7.5- 8% at the Jun meeting. 13 of 19 officials said the first interest-rate increase would be warranted in 2015 or later. The FED has kept the benchmark lending rate in a record-low range between zero & 0.25% since Dec 2008.
Photo: Bloomberg
Protesters attempted to storm the US embassy in the Yemen capital Sana’a & one was reported to have been shot dead, while demonstrators rallied in Egypt & Iran against a film seen as insulting to Islam. The spread of violence follows the killing of the American ambassador to Libya, & 3 colleagues during an attack on consular buildings in Benghazi 2 days ago. Groups tied to al-Qaeda may have been involved & several people have been arrested in Libya for that attack. Demonstrators in Sana’a today breached the embassy compound’s security perimeter & set 2 cars ablaze, as security personnel fired into the air to disperse the crowd. In Egypt, at least 216 people were injured, most from tear- gas inhalation, in a 3rd day of clashes near the US Embassy in Cairo. There were also demonstrations outside the Swiss mission in Tehran, which represents US interests in Iran. Anti-American violence threatens US efforts to establish ties with the new govs that are emerging in the MidEast after last year’s wave of revolts. These are negatives for all stock markets. If nothing else, oil is heading higher.
U.S. Embassy in Yemen Stormed as Protests Over Film Spread
There were no shortage of buyers after Big Ben made his announcement. He's committed to low rates that they will be extended even when the economy recovers. Sounds good, but all is not well. Violence in the MidEast is on the rise, threatening major oil suppliers. Europe remains in a recession while the debt messes drag on. While China is doing well, it's not good enough by its standards. Then there is the US. The fiscal cliff has not gone away. It's approaching, only a few months away & nobody in DC is doing anything. In addition, the stimulus by the FED has not done that much good since the last recession. Nobody knows what good this stimulus will do. But Dow feels great at its 4 years highs. Once again, breadth is thin relative to the big gains for the averages. Also rising gold prices are bets against this stimulus.
Dow Jones Industrials
Click below for the latest market update:
Treasury yields:
U.S. 3-month | 0.097% | |
U.S. 2-year | 0.234% | |
U.S. 10-year | 1.726% |
| CLV12.NYM | ...Crude Oil Oct 12 | ...98.11 | ... 1.10 | (1.1%) |
Photo: Bloomberg
Big Ben Bernanke said the Federal Reserve (FED) does not have a specific economic target for its new stimulus program & will keep buying bonds until it sees more jobs, lower unemployment & stronger growth. "We are looking for on-going sustained improvement in the labor market," Bernanke said during a news conference. "There's not a specific number in mind. But what we've seen in the last six months isn't it." The FED said that it will spend $40B a month to buy mortgage bonds for as long as it deems necessary. It plans to keep short-term interest rates at record lows thru mid-2015 & it's ready to try other measures if hiring doesn't improve. The FED said “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.”
Fed Undertakes QE3 With $40 Billion MBS Purchases Per Month
FED officials said economic growth will improve faster than they had earlier projected as they embarked on a 3rd round of asset purchases aimed at spurring the expansion. They upgraded the estimate for 2013 GDP growth to 2.5-3%, compared with 2 to 2.2% in Jun. Estimates for 2014 are for 3-3.8% growth, versus 3-3½% previously estmated. Officials forecasted today that unemployment will average 7.6-7.9% in Q4 2012, compared with 7.5- 8% at the Jun meeting. 13 of 19 officials said the first interest-rate increase would be warranted in 2015 or later. The FED has kept the benchmark lending rate in a record-low range between zero & 0.25% since Dec 2008.
Protesters attempted to storm the US embassy in the Yemen capital Sana’a & one was reported to have been shot dead, while demonstrators rallied in Egypt & Iran against a film seen as insulting to Islam. The spread of violence follows the killing of the American ambassador to Libya, & 3 colleagues during an attack on consular buildings in Benghazi 2 days ago. Groups tied to al-Qaeda may have been involved & several people have been arrested in Libya for that attack. Demonstrators in Sana’a today breached the embassy compound’s security perimeter & set 2 cars ablaze, as security personnel fired into the air to disperse the crowd. In Egypt, at least 216 people were injured, most from tear- gas inhalation, in a 3rd day of clashes near the US Embassy in Cairo. There were also demonstrations outside the Swiss mission in Tehran, which represents US interests in Iran. Anti-American violence threatens US efforts to establish ties with the new govs that are emerging in the MidEast after last year’s wave of revolts. These are negatives for all stock markets. If nothing else, oil is heading higher.
U.S. Embassy in Yemen Stormed as Protests Over Film Spread
There were no shortage of buyers after Big Ben made his announcement. He's committed to low rates that they will be extended even when the economy recovers. Sounds good, but all is not well. Violence in the MidEast is on the rise, threatening major oil suppliers. Europe remains in a recession while the debt messes drag on. While China is doing well, it's not good enough by its standards. Then there is the US. The fiscal cliff has not gone away. It's approaching, only a few months away & nobody in DC is doing anything. In addition, the stimulus by the FED has not done that much good since the last recession. Nobody knows what good this stimulus will do. But Dow feels great at its 4 years highs. Once again, breadth is thin relative to the big gains for the averages. Also rising gold prices are bets against this stimulus.
Dow Jones Industrials
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