Markets take a break; Europe’s problems don’t
After yesterday’s steep drop, the markets rallied today, with the major U.S. indexes ended in positive territory.
We spoke with economic consultant, and the man behind the blog The Street Light, Kash Mansori. He says markets rarely fall in a straight line and today’s rebound is likely more of a wiggle. He says investors were likely reacting to a few of bits of positive news, a slightly lower yield rate on Italian bonds, some signs of stability in the Italian and Greek governments – Greece has a new Prime Minister — and domestically a drop in the weekly rolls of first-time unemployment claims, but it’s just as likely that people today were just taking a little break from panic. Mansori says investors will remain a bit jumpy until the European Central Bank makes their intentions known.
The European Central Bank (ECB) is taking small steps toward a role it has long resisted, as the “lender of last resort.” Mansori says the ECB’s effort to stay out of the fray does not jibe with the role of central banks throughout history. There’s a long tradition, centuries long, of central banks stepping in when their governments run into liquidity problems. Of course there’s no precedent for such action from a central bank that serves so many individual nations; when it comes to taking decisive action, the ECB is answering to a lot of masters. Among them: Germany which is dead-set against the ECB saving the continent.
So, a break in the panic for investors, but it’s going to take a lot more than today’s news to calm the jittery markets.
Also on the show today, there’s word that just over half of working mothers in the U.S. get paid maternity leave from their employers. Meanwhile, the number is 18 percent for those without a high school diploma. That income gap between college graduates and high school drop outs is widening, and that drops pace of the Marketplace Daily Pulse today.
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