Thursday 22 October 2015

Top Tweets Today: 22/10/2015

ECB president Mario Draghi hinted at increasing the current amount of QE used to purchase bonds as the eurozone battles to sustain inflation higher than the 1% mark. This has been expected for a while now but today was the first time that Draghi specified a date for which policymaker would have to reassess the conditions in the eurozone that would suggest increasing the amount of bonds purchased each month.

The current expiration of the program is September 2016 but with inflation hovering just above the 0% mark I have a feeling we might see this extended into 2017.  With debt overflowing and the tax base declining it does look as if the situation could mirror what we are seeing in the US only difference would be the political tension stemming from disgruntled voters could very well discourage governments from implementing sweeping changes that would upset balance of things.
It's not all doom and gloom this earning season as McDonald's reported better than expected sales growth in the US for the first time since 2013. The world's most famous fast food outlet has battled stiff competition from the likes of Chipotle as it tries to rebrand itself towards a more healthier menu.
The company did say it expect headwinds to be felt from store restorations as well as higher than expected wage hikes.

I think it's a well known fact that the company receives a lot of flack from many corners of the weight loss industry as part of the problem of obesity setting in developed countries but I'm encouraged to see how CEO Steve Easterbrook has focused on food quality on the menu which is starting to play a big role in consumers choice especially in developed nations.

Companies often get lead down the route of improving shareholder value and end up churning out quantity rather than quality. What we finding here is in a constrained economy the consumer will look for the best value, something I think McDonald's has done well this quartet so let's hope they can continue this trend.
Judging by the opening session on US indices it looks like the downtrend is set to break if the bulls can find it in themselves to hold levels above the downtrend. We've seen a bleak 2015 in terms of returns as worries flood the market from US interest rate hikes to Chinese lack of economic growth. Those themes have cooled off quite a bit from the panic seen on 24th August this year.

It would be great to see the highs being tested again but it's not to see things could continue on there never ending path to heaven, sometime someplace somewhere this market will eventually kick the bucket, right now it's just a ticking time bomb.
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