Markets await ECB decision, expect big bazooka

Global markets are mostly down, awaiting the European Central Bank meeting Thursday. One thing is for sure: traders seem to be expecting a big bazooka from the ECB. They won't be content with $500 billion and out. Some want $1 trillion in bond buying. Others want unlimited liquidity, an open-ended quantitative easing program.

You can see this in the market reaction right after the open to a Dow Jones headline that the ECB was considering proposals for a one-year bond buying program of roughly 50 billion euros a month, which translates to about 600 billion euros a year.

The German stock market rallied, then dropped. The euro dropped, then rallied.

See? Many think 600 trillion as not enough.

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Regulators seem a bit anxious. Ewald Nowotny, an Austrian ECB member, was trying to talk everyone down when he said "One should not get overexcited about it."

The exception to the down markets overnight is China, where Shanghai was up 4.7 percent, marking the biggest rally since 2009. Have you noticed how wacky the mainland Chinese market has become?

Shanghai Index this week:

• Monday: down 7.7 percent
• Tuesday: up 1.8 percent
• Today: up 4.7 percent

The big down move Monday happened because Chinese regulators announced they were changing margin requirements, then said yesterday they were not trying to curb the market rally. Markets there are also moving on additional stimulus hopes.

Read More China faces biggest fiscal challenge since 1981

Elsewhere:

1) Lots of talk in the last few days on how odd it is that yields are now well below the yield on the S&P 500:

• 10-year Treasury: 1.80 percent
• S&P 500: 2.0 percent

This is a fairly rare occurrence. (One trader said it was just the fourth time in over 50 years.)

2) I love regional banks because they are easy to understand. They primarily make money in two ways: interest on loans and charging fees for services.

Minneapolis-based US Bancorp beat by a penny. This is one of the best of the regionals, with a broad base in consumer and business lending. On loans, net interest margin of 3.14 percent was down only 2 basis points quarter over quarter, better than most. Loan growth of 4.2 percent year over year was fair, but not great. Fee income was strong, as well.

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Cincinnati-based Fifth Third is a good example of how lower rates for loans is hurting banks. Net interest margin fell 14 basis points to 2.96 percent because some loans were repriced at a lower interest rate. Loan growth was 3 percent year over year, about in line with the 2 to 4 percent growth that USB reported.

Still, these regionals have gotten clobbered just as much as the big guys. They're all down about 10 percent this month.

3) BHP Billiton is the latest oil company to sharply reduce its drilling activity. CEO Andrew Mackenzie said the company would reduce the number of rigs operated in its onshore U.S. business by approximately 40 percent by the end of fiscal year 2015. BHP is also taking write-downs on its petroleum business. While BHP is thought of as a mining company, it has substantial oil interests in addition to its copper and iron ore production.

Read More OPEC's Al-Badri says oil prices will rebound

4) Housing starts, at 1.089 million, were the highest in 9 years, up 4 percent. Permits for single family homes were up 4.5 percent, the biggest increase since September 2012.