global markets

Global Markets Have Best Week Since 2009

Markets around the world had their best week in more than 2 years following a coordinated move early in the week by central banks to cut borrowing costs for banks. The jobs reported late in the week also gave investors confidence that the U.S. economy will avoid another recession. And finally signs that Europe is working hard to get a deal ahead of a December 9 summit, which has been viewed as a make or break summit, also helped the markets.

On Friday, stocks ended the day flat after giving up nearly all of their gains as traders took profits ahead of the weekend. News of the unemployment rate dropping from 9% to 8.6% sent stocks up out of the gates, but soon came back down as investors realize the drop in the unemployment rate came from unemployed workers not looking for jobs anymore not the 120,000 job gain.

The week ahead will be all about Europe as the European Central Bank is expected to cut interest rates again next week. This will weaken the euro and make higher-yielding currencies more attractive.

“People have been playing up the fact that the euro zone is running out of time because their steps have been incremental and not big enough to calm fears,” said Mark McCormick, currency strategist at Brown Brothers Harriman in New York. “They are making progress, but everyone is looking for a game-changer.”

Gold prices rose the past week as well and saw its largest weekly gain in over a month. Gold was up 0.2% at $1,746.

Oil prices moved higher as well as a lower unemployment rates means more demand for oil, and tensions in Iran have increased over its nuclear program raising fears of supply disruptions.

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