Photo: Martin Cathrae / Flickr
Things got ugly.First the scoreboard:
Dow: 13,927, -108.1 pts, -0.7 per cent
S&P 500: 1,511, -18.9 pts, -1.2 per cent
NASDAQ: 3,164. -49.1 pts, -1.5 per cent
And now the top stories:
- There was a hodge-podge of news today, and for the most part it was negative.
- Housing starts dropped 8.5 per cent to 890k from last month’s reading of 973k. This was much worse than the 920k level economists were looking for. Housing has been a rare bright spot for the global economy. So far this week, we’ve gotten two disappointing housing reports.
- Caterpillar, the global supplier of construction machinery, reported a set of ugly dealer sales statistics. In the three months ending in January, the global sales decline accelerated to 4 per cent. The North America and Asia/Pacific regions both saw double-digit declines.
- Commodities also had an ugly day today. Oil prices fell 2 per cent today on no obvious news. There were, however, rumours circulating that one or two hedge funds were liquidating some big commodities positions.
- Gold also fell today, settling at $1,578/oz and then tumbling even further to as low as $1,558. Two charts explain why gold is collapsing.
- The Federal Reserve published the minutes of its latest Federal Open Market Committee meeting. Several Fed officials warned of reducing or ending QE too soon. But if there was one sentence that freaked out the markets, it was this: “A number of participants stated that an ongoing evaluation of the efficacy, costs, and risks of asset purchases might well lead the Committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labour market had occurred.” In other words, the Fed’s easy monetary policy might not be as easy as some people think.
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