laser sky satellite

Photo: European Southern Observatory

Today was a day of pondering existential threats to entire political/financial systems. Not surprisingly, everything sold off pretty hard.But first, the scoreboard:

Dow: -151.44
NASDAQ: -57.18
S&P 500: -24.31

And now, the top stories:

  • All weekend we talked about Italy, and then guess what: Italy crashed today: After opening down just a modest 1%, the main FTSE MIB index fell 3.9% (though at one point it was closer to down 5%). Bonds yields ripped higher like crazy, in a move that truly threatens the eurozone in an existential manner. Italy is too big to rescue.
  • Stepping back a moment, there was negative news out of China over the weekend: Inflation was hotter than expected and imports were slower than expected. Partly due to that, and partly as a response to Friday’s weak jobs report, most Asian markets had a rough night. (Shanghai actually ended higher, though Hong Kong got smashed).
  • In the US there was no data. Everyone’s watching the debt ceiling fight out of the eye that they’re not using to watch Europe. The two sides aren’t anywhere close. Both Boehner and Obama held press conferences that confirmed how far the two sides are apart. Today’s negotiations wrapped up just after 3:30.
  • So between Italy, the rest of the PIIGS, Chinese inflation, and the debt ceiling crisis, it was a perfect recipe for a stock drubbing. The dollar surged and gold surged, while the industrial commodities got hammered. The euro got killed.
  • In terms of corporate news, there are a few things of note, as earnings season prepares to get going in a big way. News Corp. got slaughtered — falling 7% — as the News Of The World phone hacking scandal continued to take its toll, threatening to shake the company’s entire foundations. Bank of America, ominously, keeps getting smashed, losing another 3%. Goldman Sachs lost another 2%. Several of the big momentum names: Netflix, Lululemon, Chipotle, Sina all got hit pretty hard.
  • For some important reading, click here to see how Italy got to be such a wreck >

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