By Greg Peel

The Dow rose 211 points or 1.7% while the S&P jumped 1.7% to 1360 and the Nasdaq added 1.4%.

On Wednesday the capital city of China's Hunan province, Changsha, announced an RMB 825 (~$130bn) stimulus package to be invested in 195 large projects including an airport and urban transit initiatives. China's State Council announced a plan to promote the economy of the country's central region, encompassing six provinces, but did not put a figure on it.

If one considers there are 23 provinces in China, and that Beijing's net stimulus package in 2008 was US$586bn, one might see $130bn for one province to be promising news.

On the subject of stimulus, it was nevertheless last night's comments from ECB president Mario Draghi that sparked a solid, but not particularly convincing rally in global stock markets. The Dow, for example, jumped 200 points from the bell and stayed there. Germany's DAX was up 2.75%. Clearly Draghi's comments were welcomed, but we've had little more than commentary out of Europe for the past three years.

"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," Draghi said, at an investor conference in London. "And believe me, it will be enough."

The critical word here is "mandate". What Draghi is implying is that the ECB will again start buying Spanish and Italian bonds in the market. The ECB did so last year, but came under intense criticism from some corners of the eurozone, with the claim being that such action was illegal under the eurozone's charter. The ECB is there to look after all of the eurozone, so in singling out individual members for specialist treatment the central bank is arguably robbing Peter to pay Paul, without Peter's consent. No direct bond purchases have been made in 2012. So if "whatever it takes" cannot, legally, include that which might actually save the euro in the short term, such comments are just a lot of euro-fluff. However...

"To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate," said Draghi, in reference to said bonds.

Mandate arguments aside, the world has been screaming out for the ECB to act in such a fashion all year, or to roll out another LTRO, or both, or just something, for God's sake. Draghi's recent meagre 25 bip rate cut was a source of great disappointment and frustration. The reality is the eurozone is in a state of fiscal policy flux at present, so it's a bit hard for the central bank to be definitive on monetary policy.

Which is why Draghi's words have been met with bemusement from many a commentator. For three years there's been a stuck CD in Brussels going "whatever it takes, whatever it takes, whatever it takes" and yet here we are. Talk is cheap. Action has been, to date, limited to spot fire quenching with no definitive attempt to address the real inferno. Commentators fear that even if Draghi is about to start buying stressed euro debt, the process will be slow and potentially cobbled by euro-bickering.

Draghi's words were nevertheless enough to send traders scurrying, but not every market moved on the news. Those that did had "short covering" written all over them. The euro shot up US1.2c, sending the US dollar index down a solid 0.9% to 82.84. The Spanish ten-year yield plunged 50bps to 7% and the Italian 40bps to 6%. Yet on the other side of the ledger, the German equivalent rose a mere 3bps and the US 2bps. There was no "flight out of safety".

Maybe most telling was the gold price, which managed only a limping US$12.20 gain to US$1615.80/oz. Stock markets love stimulus, and in theory so should commodities. Yet base metals were all but unmoved in London and the oils again added mere cents. Not really the stuff that should have the Aussie up 0.8%, as it is, to US$1.0395. If anything, "risk on" should now mean pressure on the safe haven.

So here we have the contrast of "real" stimulus from China, and yet more stimulus talk from Europe. We also, of course, have a heightened expectation the Fed will announce fresh initiatives next week. If this is the case ? and I wouldn't count your chickens ? at least Bernanke's talk does actually translate into action.

On that basis, Wall Street might have even been disappointed in last night's 1.6% gain in June durable goods orders. Bad data would be better. At least pending home sales fell 1.4%. It was all lost in the wash however, as were last night's earnings results. Starbucks missed, Amazon missed. Zynga, a company that provides games on Faceplant, missed so badly its shares were down 27%. Faceplant shares fell 8.5% ahead of the company's after-market announcement, and another 11% after the bell having revealed a slowdown in revenue growth.

On a net basis, and on the basis of companies reporting to date, the June quarter has produced no revenue growth for US companies. It's shaping up to be the worst quarter since the GFC.

The SPI Overnight was up 37 points or 0.9%.

Tonight the US will release the first estimate of June quarter GDP.

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