Jamie Ross discusses a change in direction for equities in Europe during the third quarter of the year and shares his thoughts on the European Central Bank’s recent announcements.

Glossary

ECB: European Central Bank

Fixed income security: Also known as bonds, these are debt securities issued by a company or a government, used as a way of raising money. The investor buying the bond is effectively lending money to the issuer of the bond. Bonds offer a return to investors in the form of fixed periodic payments, and the eventual return at maturity of the original money invested – the par value.

Monetary policy: The policies of a central bank, aimed at influencing the level of inflation and growth in an economy. It includes controlling interest rates and the supply of money. Monetary stimulus refers to a central bank increasing the supply of money and lowering borrowing costs. Monetary tightening refers to central bank activity aimed at curbing inflation and slowing down growth in the economy by raising interest rates and reducing the supply of money. See also fiscal policy.

QE: An unconventional monetary policy used by central banks to stimulate the economy by boosting the amount of overall money in the banking system.

Value stock: A value stock is a stock that trades at a lower price relative to its fundamentals, such as dividends, earnings, or sales, making it appealing to value investors.

Quality stock: are those of companies with higher and more reliable profits, low debt and other measures of sustainable earnings.