Last week, I looked for the kind of events that could turn around our stock market fortunes and we picked up two of them on Friday night/Saturday morning, with the European Central Bank (ECB) opting for something that looked like a European version of QE or quantitative easing. And as well, China’s central bank chopped its 12-month lending rate by 40 basis points to 5.60% and the 12-month deposit rate by 25bps to 2.75%.
As I pointed out on Saturday, the European markets loved the decision, with stocks spiking. The German Dax was up a big 2.62%, the French CAC market up 2.67% and the Spanish IBEX stock index shot up a huge 3.05%!
The big question
But why did this happen and what’s the lesson for stock market investors? This is the big question we all need to understand to ensure we invest wisely in 2015.