This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

What Thursday's European Central Bank Meeting Means for Investors

Stocks in this article: SPY

NEW YORK (TheStreet) -- Three months ago, Mario Draghi, president of the European Central Bank, set the bank on a path to lower the value of the euro. At the time, the market value of the euro was about $1.36.

The concern at that time was about the continuing disinflation of the eurozone and the possibility that the European continent was heading for a recession.

The value of the euro has dropped since then, just breaking $1.32 around Aug. 20.

Read More: Chipotle's Monty Moran Unwraps the Restaurant's Success Story

The reason for this decline: Italy was declared in a recession after the 2014 second quarter GDP numbers were announced. German growth for the first half of the year was flat. And the French economy was doing so badly that French president Francois Hollande had to re-structure his government to try to reform his country's economy.

Now, the spotlight is back on Draghi and the ECB, which has a policy meeting this Thursday.

The question is -- given all the bad news that has been reported over the past month -- what will Draghi and the ECB do to combat the looming eurozone recession and a possible Japan-like stagnation?

The first thing to come into anyone's mind these days is for Draghi to emulate the Federal Reserve system in the U.S. and move to a policy of quantitative easing.

Draghi has seemed reluctant to make such a move.

Although Draghi has stated in the past that he would do whatever was necessary to spur on the economies of Europe and keep the currency union together, he has dragged his feet concerning the move to quantitative easing.

Read More: Dollar General Offers Major Antitrust Concessions as It Lifts Bid for Family Dollar

For one thing, as Draghi looks toward America, he sees that in terms of boosting on economic growth, quantitative easing has done practically nothing.

If anything, quantitative easing has provided support for the banking system and helped the regulators to eliminate troubled banks and reduce the size of the banking system in an orderly fashion. This effort has gone amazingly well.

But quantitative easing has also helped to propel the American stock market upwards and keep the lid on longer-term interest rates. The Standard & Poor's 500 (SPY) stock index has penetrated the 2,000 ceiling for an all-time high, and the yield on the 10-year U.S. Treasury note, which was expected to run up above 3.00% this year, now rests around 2.35%.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs