Coordinated Effort by Central Banks Boosts Stocks

Attempt to lower the cost of European bank borrowing cheers investors.
8:20 | 11/30/11

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Transcript for Coordinated Effort by Central Banks Boosts Stocks
Dow futures were up sharply ahead of the bell on some breaking news it has to do with the coordinated effort from many of the world's largest central banks. Joining me now to discuss this story as well as all the other business headlines is Cali Carlin from Bloomberg TV -- good morning thanks much for joining us. Good morning Stephanie you're right this rally definitely driven by breaking news. And what this is being called is emergency dollar funding this effort by the Federal Reserve is wells 5 other central banks including the Bank of Canada. Bank of England the European Central Bank Swiss National Bank. And what -- doing is they're basically lowering the cost to borrow dollars before he made this move this morning. The cost to borrow dollars it hit a three year high and what they're doing. Is -- making it cheaper for Europeans to -- dollars to increase liquidity and help try to ease this European credit crisis. An interesting okay. Now that's in the US many of the country's biggest banks have gotten a downgrade Kelly why now and what effect might this have on customers -- Yet -- is a slew of a downgrade S&P downgrading. More than a couple dozen banks around the world including Goldman Sachs Bank of America Merrill Lynch just. And the really trying to shrug this off as a peace and this is because of its. The way that they do their credit rating and -- we did see a big. Decline after hours trading for the banks -- this morning. And their -- to recover because of this news from the central bankers. Again a lot of different headlines coming out but you know -- hardest say how exactly this will affect customers we don't. No right now but we do the banks are going to need to raise more money Bank of America admitting his mind it's going to need to raise. Billions in additional collateral in one of the ways -- done so in the past is to try. Tack on more fees to customers remember -- -- America recently tried to add -- five dollar monthly charges to checking. He is -- -- faced a backlash from customers so we don't know what they're gonna have to do but -- only a few ways to raise revenue and raise money payments to customers. -- as well as cut jobs perhaps OK let's move on because just an hour ago we got a new report on US productivity. The Labor Department. Says it increased at an annual rate of 2.3. Percent in the third quarter. How should we be interpreting that. Wasn't it isn't increase. However it's not an increase. -- not -- analysts had been expecting they were hoping to -- an even greater increase productivity but we did also just get a report from ADP on US jobs and show bit. US added more jobs in November than originally expected said that he did beat expectation -- to be specific we added 206000. Jobs. In November all of the success from Black Friday -- will hopefully help support a lot of those jobs which are in every aspect. Could be very positive sign at this point OK we're getting -- you mentioned shopping we're getting some more data this morning about Black Friday. Car sales -- explaining why that happens. Well it was -- Great Black Friday record Black Friday across the board an auto sales were among this. Benefiting on in that shopping spree your shopping surge on Friday and because -- -- this Friday it actually helps. Give a lot of -- their best monthly numbers from -- November. Since the 2009. Cash for clunkers program remember. And a haven't Democrats press for -- Lyles and passengers in car sales also searched this weekend. The fact that gas makers are showing their first losses in three years why in the rat. This global -- specifically in Europe. And Asia are having and losses because of decreasing demand especially in Europe because the crisis there. Yeah that makes sense we tend to think of the US importing oil but the countries actually poised acts court -- and it takes and why act. He had this big did this could be the first time in 62 years it would export more oil gas and he's -- important what's happening. -- -- we're seeing an increasing demand from emerging markets specifically Brazil and Mexico Singapore also another big importer of US. Well meanwhile demands -- US is declining because. And that a lot of pressures still. And the economy -- -- -- Okay let's talk about homes it just a little while Christmas getting -- stats on pending home sales meanwhile you've got some good indicators from Home Depot -- Lowe's which are all about bellwethers. For home building tell us what you got. It was sales -- -- that both Home Depot and Lowe's. Are up year over year there also outperforming consumer discretionary stocks are for Home Depot. And lows in the inner -- disagrees that shows stability. In the housing market if people are willing to put money into their -- -- -- prowling. Near their prime not likely to default pay -- and that's more he improving your home if you're planning on defaulting or not -- -- -- pay your mortgage that this does. Indicate signal some stability and housing and -- You know integrate that we get this sort of drumbeat of positive news and you're looking at the markets right now just in the first five minutes of trading here wanna take a look at the big work. Because true the Dow -- up by 320. Points right now by more than two and a half percent so clearly a lot of positive sentiment all right -- a little bit about. I -- emergency dollar funding is adding that the European central bankers -- are making an impact today let's fast pitch. Wendy's is about to topple -- king what's the story there. That's right well Wendy's and the king Burger King that could be it. A long rivalry but -- say that it looks like Wendy's is going to dethrone. Burger king and become the second largest. Burger chain country and the world excuse me. Rather McDonald's of course to number one article -- islands. Alison what's happening is that Wendy's has really focused on the quality. Of their food and that's helping give an edge of her barking at -- that they had. Eighteen parent likes and -- in the works they're trying to even stepped up to be. More of -- fast casual. Like panera so. At Cambridge all over the place because I want to talk a little bit about politics now -- up. This morning of course we heard from a woman here on Good Morning America. Cincinnati thirteen year affair with Herman Cain and things are clearly not looking good for -- right now but they are for Mitt Romney. Tell how Wall Street is showing their support for Romney. It's true luster has really been lining up behind Romney is -- -- Steve Schwartzman a big private equity. And manager getting behind Romney executives at JPMorgan raising money for Romney -- another there's. -- Wall Street wives doing a big fund raiser for and Romney on Wednesdays he -- this week Wall Street is really. Been lining up behind behind Romney and you know he is. A Wall Street -- private equity backgrounds are definitely has some friends around here. Yes friends among the bankers. Cool what's been happening is that states are desperate for cats desperate for new sources of revenue as a distinct. Had been pumping a lot more money in marketing into their lottery programs and as a result. Lottery ticket sales are rising you know I I didn't happen. You know what I thought you're gonna say -- because of those bankers that won the lottery this week -- not organization bankers -- -- if I can't -- I think granite and need the money and money I hate that store. I it is frustrating and it actually because states are in a budget crunch time that's interesting. OK anything -- watching today Cali. We were still looking. A close eye on AMR the parent company of American Airlines filing for bankruptcy yesterday and stop dropping more than 80%. And a lot of details still coming out today of what -- bankruptcy and restructuring is going to look like -- and also we're getting. FCC about. And their feelings about the AT&T mobile merger that would -- keeping an eye AT&T -- OK let's take Wal-Mart look at the Dow before we let you go because this is an extraordinary rally we're watching right now the Dow up by more than -- -- and and 25 point is this all Europe driving this. This really is that move by central bankers by the Federal Reserve and the other -- -- -- -- this emergency dollar program again going over very well with traders and investors. Right Cali Carlin and Bloomberg TV thanks -- -- have a great day thinks it needs --

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