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European Euphoria, Earnings and E’s back

Alleluia! Europe has come good! I’ve been whinging about these heartbreakers, near-do-wells and let down merchants since 2009. Then the European Central Bank had a slow learner called Jean-Claude Trichet, who was raising interest rates because he was worried about inflation!

I wrote stories for my SSR subscribers with headlines such as “Europests”, “EuroTrash”, “Euro Anxiety” and “Europe Derails Rally Again”!

I know there’s a long road to hoe for the QE to actually work but Mario Draghi, the ECB boss, promised a “bazooka” and this is what a central banker thinks is a big gun. And it’s when he left the end date of this 60 billion euros a month bond-buying plan open ended. He plans to do a Ben Bernanke and make it happen until banks lend, consumers borrow and business starts to invest as well as hire.

This is why stocks have headed up and while critics can point to just about every European rescue play bringing a great market response, they were all pop guns compared to this. As I say, no sing – Hallelujah, k.d.lang-style!

What have I liked this week?

What didn’t I like?

The best ever QE joke

Only in the crazy and wacky world of economists would there actually be some measurement around the best ever joke created on quantitative easing!

This is it and it comes from Ben Bernanke, the former Fed boss and creator of the QE program that the US used effectively: “QE worked in practice but not in theory!”

(By the way, I couldn’t find any more jokes on QE – what do we pay comedians for? – but I did find an article entitled: “QE is a joke!”)

One more for the Intellectuals out there

A Roman walks into a bar holding up two fingers and asks for five beers. (Think about it. As I warned, we economists are crazy, wacky kinds of guys.)

For those who miss me – jokes aside

I’m back on TV on the Sky News Business Channel as of Tuesday (27th Jan) and I look forward to getting back into it. I hope you can join me.

Top stocks – how they fared

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The week in review (click the blue text to read more):

What moved the market (click the blue text to read more)

The week ahead:

Australia

Overseas

After the Australia Day long weekend, the week kicks off on Tuesday with the release of the NAB business sentiment survey for December. But investors will be hanging out for the official inflation measure from the ABS – the Consumer Price Index – released on Wednesday. CBA Group tips an inflation hike of 0.2% in the December quarter.

Overseas, the spotlight is on the two-day long US Federal Reserve meeting as they decide interest rate settings and on Tuesday there’s a heap of data coming out of the US of A – I’ll be looking closely at the flash services sector reading and consumer confidence.

Calls of the week (click the blue text to read more):

Food for thought

Faith is taking the first step even when you don’t see the whole staircase.

– Martin Luther King, American civil-rights activist

Last week’s TV roundup

Stocks shorted

ASIC releases data daily on the major short positions in the market. These are the stocks with the highest proportion of their ordinary shares that have been sold short, which could suggest investors are expecting the price to come down. The table also shows how this has changed, compared to the week before.

This week, one of the biggest movers was UGL, with it’s short position increasing by 0.89% to 13.27%. Cardno followed – it’s short position increased by 0.85% to 10.30%.

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Source: ASIC

My favourite charts:

DAX jumps on Draghi’s pledge!

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Source: Yahoo!7 Finance, 23 January 2015

It’s been a good spell for the German DAX this week – driven higher by the ECB’s announcement that it will inject over 1.0 trillion euros of stimulus into the euro zone economy! Here’s a look at its movement since the 16th of January.

Time in the market has its rewards

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Source: Vanguard, 19 January 2015

The chart above shows how $10,000 invested in the S&P/ASX 200 in 1970 would have grown to $716,050 by July last year. And that’s including the years of the GFC!

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