Banks Continue Rally as Italy Keeps Hope Alive

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Morgan Stanley

It looks like investors are finally getting a chance to clear their minds off the mess in Europe with leaders of all nations in the affected Euro-zone taking concrete steps towards stability in the region. Italy’s Prime Minister Mario Monti did well to make up for the damage to the stock market a few weeks ago from news that his country is on the edge by announcing a series of cost cutting measures combined with steps to stimulate growth in the boot. Spirits on Wall Street were also lifted substantially last Friday with the Bureau of Labor Statistics reporting that the U.S. unemployment figures fell to a 30-month low of 8.6% for November, driven by an increase in jobs in the private sector. [1] Morgan Stanley (NYSE:MS) continued its dream-run at the market with a 7% rise in its share price over trading on Friday, recording a total growth of 17% over last week. Shares for JPMorgan (NYSE:JPM) and Barclays (NYSE:BCS) also climbed 6%.

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The Italian government will deliberate on a series of measures needed to bring the country’s ailing economy out the red. The plan includes steep budget cuts and a delay in the retirement of workers to rope in expenses, while introducing various taxes to help fill government coffers. [2]

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The mood in Asian and European markets will likely rub-off on Wall Street today, as they saw another day of growth with a lot of expectations pinned to the meeting between Angela Merkel and Nicolas Sarkozy. The heads of the Eurozones biggest economies, Germany and France, will hopefully come up with a plan to improve their support to the most-affected PIIGS economies, while ensuring that better budgetary controls can be enforced on these nations.

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  1. Unemployment rate falls to 8.6% in November; payroll employment rises by 120,000, BLS Website, Dec 2 2011 []
  2. Italian prime minister to present €30 billion budget plan, CNN, Dec 5 2011 []