Monday’s Mid-Day Movers: 3 Stories Driving Markets

The major stocks were wavering Monday as the Standard & Poor 500 revised its credit rating outlook for the U.S. As of 12 p.m.:

DIJA: +0.13% to 15267.35 S&P 500: +0.18% to 1646.35 NASDAQ: +0.37% to 3482.02
Gold: +0.58% to 77.75 Oil: -0.45% to 22.2599 U.S. 10-Year: +1.67% to 21.97

Here are three stories helping shape the market Monday afternoon.

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1. Are the Markets Under a Worry Watch? “Good” news but not “too good” set off a Friday stock market rally as major U.S. indexes posted weekly gains.

Major U.S. stock market indexes rallied on Friday after the monthly Non-Farm Payroll Report showed modest employment gains while unemployment climbed from 7.5 percent to 7.6 percent. The last few weeks in the stock market have been all about good news/bad news. Is good news “good” or is bad news “good” as investors try to determine the next moves by the Federal Reserve in regards to its quantitative easing program? (Read more.)

2. Europe Showdown: Will Germany Affirm ECB’s Super-Solution? The Federal Constitutional Court is set to review the legality of a bond purchasing program run by the European Central Bank this week. The move will result in a showdown between the German central bank, Bundesbank, and the ECB, as Bundesbank President Jens Weidmann is expected to testify against the Outright Monetary Transactions program he voted against in the past.

The OMT allowed the ECB ‘unlimited’ access to buy short-term government bonds from countries signed up help under the European Stability Mechanism―a program also under review this week―as well as the European Financial Stability Facility… (Read more.)

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3. 5 Ways Regulators Are Killing ‘Too Big to Fail’: The term “systemically important financial institution” — or SIFI — fell into common use in the wake of the 2008 financial crisis. According to the Financial Stability Board, “SIFIs are financial institutions whose distress or disorderly failure, because of their size, complexity, and systemic interconnectedness, would cause significant disruption to the wider financial system and economic activity.”e

In other words: SIFIs are too big to fail, a term which itself has become so commonly used its acronym (TBTF) has pretty much replaced it in day-to-day use… (Read more.)

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