“The key to investing success is emotional discipline. If intelligent were the key, there would be a lot more people making money in trading” — Victor Sperandeo

1. G20 Meeting Conference in Shanghai Concluded — leaders from the world’s top economies declared “Monetary policies will continue to support economic activity and ensure price stability…but monetary policy alone cannot lead to balanced growth,”. Participants also repeated previous pledges not to engage in competitive currency devaluations and promised to “consult closely” on exchange markets.
2. China Eases Bank Lending — China’s central bank cut its reserve-requirement ration by another 0.5% point — its 5th cut in the past 12 months. The move shows further weakening of the yuan, which hit its weakest level vs. the US dollar in 3 weeks.
3. Moody’s Cuts China Outlook to Negative — Moody’s Investors Service has lowered the outlook on China’s credit rating from stable to negative, citing a weakening of fiscal metrics and a continuing fall in foreign exchange reserves. Moody’s current Aa3 rating on China is still seven notches above junk, so even if the agency were to follow up on its warning, investors wouldn’t have to suddenly start selling the country’s bonds.
4. Eurozone Recovery Loses Momentum – more deflationary pressures in the euro-zone are surfacing, raising the chances ECB President Mario Draghi will increase stimulus at a central bank meeting next week. Markit’s composite Purchasing Managers Index fell to 53 from 53.6 in January – its lowest level in 13 months – while the firm’s measure of output prices across manufacturing and services fell further below the key 50 level.
5. Auto Loans ‘s Size Hits Record — the avg amount financed for a new car or truck in Q4 rose 4.1% from last year to a record $29,551 per Experian Automotive. The avg monthly payment rose 2.3% TO $493, also a record, even as as loan terms got longer. New car loans for subprime lenders rose as well.
6. Low Priced Stocks Surge — courtesy of BIG, since 2/11, the average stock in the S&P 1500 is up an impressive 16.3%, but the performance of low priced stocks has trounced that. For example, on 2/11, there were 52 stocks in the S&P 1500 trading for less than $5 per share. Since then, the average return of those stocks is a gain of 58.9% with a median gain of 45%!

The week ahead — Economic data from Econoday.com: