European Markets Rally For Third Day, US Stocks Take A Break

Asian markets advanced on Monday, as expectations for new stimulus plans from the US and Europe grew. The Nikkei climbed .8% to 8635, the ASX 200 rallied .9% to 4246, and the Kospi gained .8% to 1844. Fujifilm reported strong earnings, lifting the company’s shares more than 6%. The Hang Seng outperformed, jumping 1.6% to 19584, as heavyweight HSBC gained 1.7%. The Shanghai Composite slumped .9% to 2110, as it continued to move independent from the regional trend.

The stimulus rally continued in Europe for a third day, led by banking shares which climbed 3.9%. The DAX advanced 1.3%, while the FTSE and CAC40 rallied 1.2%. Air France surged 18.6% after managing to sharply cut operating losses.

The Federal Reserve will hold a 2-day meeting beginning on Tuesday, and the ECB and Bank of England will issue rate decisions on Thursday, providing a golden opportunity to announce a new stimulus plan. The excitement began on Thursday when ECB president Mario Draghi pledged to do whatever it takes to secure the euro’s stability.

US stocks took a breather, as the major indexes closed moderately lower. The Nasdaq slipped .4% to 2946, the Dow eased 3 points to 13073, and the S&P 500 fell less than 1 point to 1386.

Supervalu shares surged 12.6% after the company fired its CEO in response to poor earnings.

Chicago Bridge & Iron slumped 14.2% after announcing it would purchase Shaw Group for $3 billion. Shaw Group shares skyrocketed 55% on the news.

Currencies
The Euro pulled back from its recent gains, declining .6% to to 1.2257, and the British Pound slipped .3% to 1.5711. The yen rose .4% to 78.15, while the Australian Dollar and Canadian Dollar closed little changed.

Economic Outlook
The Dallas Fed’s manufacturing survey unexpectedly tumbled to -13.2 from last month’s 5.8, way below forecasts for a reading of 3.0.

Tuesday’s busy economic calendar will include Personal Income & Spending, the employment cost index, Chicago PMI, the Case-Shiller home price index, and the Conference Board’s consumer confidence report.