A fiscal stimulus totaling $819 billion are going to be used in order to shore up the continuous bleeding from the toxic assets which happen to stay as a burden on banks Balance Sheets.
The endless deteriorations in financial markets had placed various strains on the inaugurated president; it's critical now because any failures won't be tolerated and will have a severe impact on his high hopes that was build upon him and the change he promised, also because the US citizens have been hammered from the prolonged agony of the Credit Crisis which resulted in more than 2.59 million terminated job in only one year.
Based on the proposed plan the US indices ended green; Dow Jones industrial average gained 2.46% or 200.72 points reaching to 8375.45 levels, S&P 500 added 3.36% or 28.38 points reaching 874.09 levels, finally NASDAQ inclined 3.55% or 53.44 points reaching 11558.34 levels.
The approved plan by the House of Representatives is now on its way to the Senates pleading their approval; the senates have no other measures in order to deal with protracted Credit Crunch that led to a deep recession, which resulted in conquering the world's expansion.
The new president is insisting on the fact that lawmakers must put all their disagreements on a side so they can be capable of salvaging the economy from continuous contractions that pushed the Unemployment rates to 2.59 million terminated jobs.
The approval by the house was followed by the Federal Open Market Committee which held their benchmark rates at 0.0-0.25% as they no longer have space to maneuver, but the feds came out to say that they stand ready to start buying long term treasuries, on this matter a dissent took place Lacker was the only one to demand an immediate purchase for those treasury believing that there is no time to waste.
Also the feds said that they stand ready to expend their purchases of housing debt to assure stability, as they might be seeing a gradual improvement in the growth levels in the second half of the year.
A statement was released along with the rate decision, clearing that the nonstop interventions in financial markets are needed especially after since December the housing sector, industrial production and the unemployment rates fell steeply to increase the pressures n the economy.
On inflation, the statement cleared out those pressures remains subdued as the dramatic fall in crude prices along with the weakening economic demand in the States will pressure prices down, the statement highlighted that risks to inflation is to persist below best levels.
Faith is back into markets, market participants trust the new US administration where they are working furiously in order to salvage the left over of the economy, due to that the Asian indices inclined especially now they see an approved plan by the United States reaching to $819 billion which had followed the parliament approved package of $53 billion.
Nikkei Index managed to incline 1.79% or 144.95 points reaching 8251.24 levels, along with Hong Kong's Hang Seng index which advanced 4.62% or 577.12 points reaching to 13155.72 levels after they have been closed for three days enjoying the Chinese New Year.
Our calendar contains various data which will be released from different economies across the globe...
We will start with the German unemployment data...
Germany the leading European economies had faced a severe deterioration in the levels of their growth levels where they got dragged in a recession which they had no connection to. The falling exports due to the weakening demand from the world economies had resulted in stalling the manufacturing sector resulting to drastic job terminations.
Based on that the Unemployment rates in Germany and the overall zone had kept on inclining; the start of our fundamentals was the ILO Unemployment rate where it inclined to 7.2% in December from the previous 7.1%, yet later today we will witness some jobless data for the month of January.
According to the median estimates the Unemployment rate inclined in December to 7.7% form the previous 7.6% with a total job layoffs reaching to 30 thousand coming worse than the previous 18 thousand. The surge in the levels of jobless rates in Germany the leading European economy will eventually support the overall zone Unemployment rate to reach to 7.9%.
Later on we will be waiting for the Euro Zone Confidence data...
Consumer Confidence in the sixteen economies inclined slightly in December and January especially inflationary pressures continues to ease opening the chance for the European citizens to purchase more goods, but business till now see the economy will continue to weaken and the Credit Crisis will remain, especially banks are still hesitant in giving out money for business.
Based on that we will see more weakness in the Business Climate reaching to -3.50 levels in January from the previous -3.17 levels, where also the consumer confidence will weaken to -31 levels from the previous -30. With the report more types of confidence will be released, with the industrial confidence weakening to -34 from the previous -33 and the services confidence will dip south to -18 from the previous -17.