At 3:45 ET it looked like a win for the bulls was coming. But in the end, it was a flop.
But first, the scoreboard:
S&P 500: -5.88
And now, the top stories:
- The big news of the day came around 2:00 AM ET, when Moody’s threatened to downgrade Spain due to ongoing banking issues. But actually the news didn’t have a huge impact on anything.
- Also happening in Asia: Greece had another big and violent austerity riot, and Ireland approved its bailout. The euro had a very, very bloody day (though to be clear the dollar had a strong day).
- In the US futures weren’t doing a whole lot of anything before the big macro news of the day. At 8:30 we got a pretty mediocre CPI report. Yes, core inflation ticked up a little bit, but the trend is still pretty negative, and headline inflation was below expectations. The Empire Manufacturing Index surged, but the news was shrugged off. At 9:15, factory production and capacity utilization came in strong, though the internals were only so-so. For example, much of the gains had to do with utilities.
- The big story was once again in the bond market, which saw a continuation of the carnage. The dollar surged thanks to the higher yields. Gold and silver got slapped down. And after being higher all day, stocks ended up sliding, which continues a worrisome trend: yields are rising, but that isn’t being translated into bullishness elsewhere.
- Stocks tried to climb back late in the day, but the attempt failed, and the fall in the S&P 500 was pretty meaningful.
- Of note: the Justice Department officially sued BP and a host of other companies somehow connected to the Deepwater Horizon oil spill.
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