World stock markets were mostly higher yesterday on guarded optimism that the US Federal Reserve’s bold US$1.2 trillion spending plan would bring a quicker end to the worst global slowdown in decades.
By noon in Europe, Britain’s FTSE 100 was up 1.5 percent to 3,862.11, Germany’s DAX advanced 1.6 percent to 4,061.83 and France’s CAC 40 rose 1.1 percent to 2,789.48.
Their rise followed overnight gains on Wall Street after the Fed said it would pump more than US$1 trillion into the economy.
The Fed plans to buy up to US$300 billion in long-term government bonds and some US$750 billion in mortgage-backed securities, which would help revive the country’s sagging housing market.
The measures — aimed at propping up demand and spending in the US by driving down borrowing costs for consumers and companies alike — stunned investors around the world. The Fed hasn’t set out to influence long-term interest rates by buying long-term bonds since the 1960s.
“The markets are responding favorably to signs the central banks are taking more aggressive action to boost the supply of money available for borrowing in the economy,” said Andrew Bell, head of research at Rensburg Sheppards, an investment management company in Britain. “I don’t think people are euphoric, I think people realize the economy’s got pressure. But sentiment a couple of weeks ago was so steeped in gloom that the small piece of good news has begun turning things around.”
Meanwhile, new jobless claims in the US fell more than expected last week, but continuing claims set a new record for the eighth straight week.
The US Labor Department said yesterday that initial requests for unemployment insurance dropped to a seasonally adjusted 646,000 from the previous week’s revised figure of 658,000. That was better than analysts’ expectations.
But continuing claims jumped 185,000 to a seasonally adjusted 5.47 million, another record high and more than the roughly 5.33 million that economists expected.
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
The US House of Representatives yesterday unanimously passed the Taiwan Conflict Deterrence Act, which aims to disincentivize Chinese aggression toward Taiwan by cutting Chinese leaders and their family members off from the US financial system if Beijing acts against Taiwan. The bipartisan bill, which would also publish the assets of top Chinese leaders, was cosponsored by Republican US Representative French Hill, Democratic US Representative Brad Sherman and seven others. If the US president determines that a threat against Taiwan exists, the bill would require the US Department of the Treasury to report to Congress on funds held by certain members of the
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