Dow +103 on BOJ Move

The market is moving up this morning thanks to a decision by the Central Bank of Japan to weaken the yen. They’re using some of the same medicine we are: cutting rates to zero and buying back bonds. This will hopefully help Japanese exporters. Right now, all the major indexes are higher and 19 of the 20 stocks on our Buy List are up (NICK is unchanged).

Yesterday evening, Ben Bernanke gave more clues that the Fed is close to a second round of quantitative easing. The yield on the two-year note is still near a record low.

“The additional purchases — although we don’t have precise numbers for how big the effects are — I do think they have the ability to ease financial conditions,” Bernanke said yesterday at a forum with college students in Providence, Rhode Island. He said the first wave that ended in March was an “effective program.”

The Fed snapped up $300 billion of Treasuries last year, and said in August it would reinvest proceeds from maturing mortgage holdings into government debt. The central bank is scheduled today to buy Treasuries due from September 2016 to August 2020, and from March 2013 to August 2014 tomorrow.

Walgreen (WAG) had good news to report. The company said that same-store sales rose 0.4% and the stock was upgraded by Jefferies. There was also a report showing that office vacancies are now at 17.5% which is the highest level in 17 years.

Posted by on October 5th, 2010 at 10:06 am


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