To Buy Or Not To Buy?
With The European Central Bank’s January policy meeting just over a week away, investors are looking for any clues that will indicate whether or not the bank is planning to ease this month.
Initially, most thought the bank would roll out a quantitative easing program this month to combat deflation, but with Greece set to hold highly charged elections just three days after the ECB meeting, some have shifted their bets for more stimulus to March.
On Wednesday, the European Court of Justice responded to a German lawsuit against the ECB’s Outright Monetary Transaction program by saying the ECB has the authority to buy large amounts of government debt if need be. Endorsement by the court makes easing at this month’s meeting even more possible.
Deja Vu
Economists are comparing the recent slide in crude prices to a similar event back in 1985; and the comparison has oil firms shaking in their boots.
Between November 1985 and March 1986, crude prices lost 67 percent, and did not return to their original levels for two decades. In the latest slide, prices have lost 57 percent, but some see them falling even lower before reaching a bottom.
The change in drilling practices over the past 30 years makes it very unlikely that oil prices will recover at such a slow pace, but it won’t be a quick fix. On Monday, Goldman Sachs said it sees oil prices averaging $47.15 per barrel through 2015.
Elon Musk Explains The Future Of Tesla
Tesla Motors TSLA CEO Elon Musk’s Q&A session at the 2015 Automotive News World Congress was one of the most anticipated events of the week, as investors waited to see how the CEO would respond to General Motors Company GM's latest electric car offering.
Musk congratulated his peers on their work so far, but encouraged more spending on the development of electric cars.
Musk also commented that he sees Tesla turning a profit in 2020, saying that the company’s Model 3 car will need to be in full production in order for the company to be considered profitable.
The Little Engine That Couldn't
According to the World Bank, the US recovery will not be enough to spur on growth throughout the rest of the world. The bank lowered it global growth outlook for 2015 to 3 percent, down from 3.4 percent. Among other things, the bank said that uneven benefits from falling crude prices will continue to pressure the global economy as producing nations feel the pinch.
The bank also noted that with the US economy acting as the only growth engine, forward momentum is unlikely.
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