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Global stock markets are suffering from a relentless bout of manic depression — up one week, down the next. Even when you leave the stock market, sustained trends in global financial markets are few and far between.
The European Central Bank (ECB) is expected to cut interest rates by 50 to 75 basis points tomorrow after reports confirmed that inflation is not much of a problem in the Eurozone. With the U.K. economy sliding deeper into recession, the Bank of England is increasingly likely to slash its key interest rate for the third time in as many months and may prompt the government to launch a second fiscal stimulus package next year.
Global stock markets continue to be held hostage to extreme volatility.
In last week’s Global Stock Investor Hotline, I noted that I expected the British pound sterling and euro to rally against the U.S. dollar, which had reached a 2 1/2-year high against an index of the currencies of six major U.S. trading partners.
It was another extraordinarily volatile week in global stock markets last week. The S&P 500 index dropped almost 12.8% between the opening of trading on Monday and the close on Thursday, while the MSCI Emerging Markets Index fell 17.8%. On that same day, your currency positions in the Global Bull Market Alert portfolio soared, with almost all of your positions closing at or near record highs.