Stocks ended the day, month, and quarter in the red.
But first, here’s the scoreboard:
S&P 500: -29
And now the top stories:
- Futures were already pointing lower before the open, so investors weren’t expecting much. Some have suggested quarter-end window dressing was at play. But there were clearly bigger issues affecting the markets.
- Personal income and spending data was mixed. Economists expected income to grow 0.1%, but it actually fell 0.1%. Even worse, last month’s income growth number was revised down to 0.1% from 0.3%. However, spending climbed 0.2%, which was in line with expectations.
- On a more positive note, the August Chicago PMI reading came in at 60.4, ahead of the expectation for 55.0. Consumer sentiment climbed to 59.4 from its last reading of 57.8.
- However, favourable economic data could not get it out of people’s head that we were on the front end of a recession. ECRI’s Lakshman Achuthan told us the US is “tipping into a new recession” and “it is not reversible.”
- All of the economically sensitive commodities did poorly today. Copper continued its decent, falling 3% today. NYMEX crude oil settled at $79.20 a barrel, the lowest level of the year.
- China continues to freak everyone out. A source of growth for internationally-exposed US companies, China saw its credit default swaps soar, and Chinese ADRs plunged.
- Morgan Stanley also saw its CDS spreads spike and shares plunged 10.5% on concerns over its European debt exposure. Then again, we should be cautious about what CDS actually tells us.
- It was a relatively quiet day in terms of Europe news. But the selloff in Morgan Stanley shares reminded us that despite some progress, a resolution to the Eurozone debt crisis is not even close. And now an Italian newpaper is reporting the troika may require private Greek bond holders to take a 75% write down, which is much higher than the 21% expected.
- In a sad note, Eastman Kodak, a former Dow stock, has reportedly hired Jones Day for a possible restructuring. Traders smell a bankruptcy filing.
- Don’t Miss: 11 Companies That Will Get Crushed When The Government Cuts Back