STOCKS MAKE HUGE REVERSAL, SILVER CRASH CONTINUES: Here's What You Need To Know

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Photo: Eddie”77 on flickr

A weird day with all kinds of bobbing and weaving underneath the surface.But first, the scoreboard:

Dow: +65.47
NASDAQ: +17.14
S&P 500: +6.24

And now, the top stories:

  • Yesterday we got some big-time selling in the commodity and stock markets, and that set the tone throughout the day. Late at night (US time), markets started to float higher again, but the big story overnight was major selling in Shanghai, and sharp selloff in the hot commodities (silver, oil, naturally) and general pressure across all the world’s equity markets.
  • In the very early going in the US, China announced yet another Reserve Requirement Ratio hike on its banks. That now stands at 21%. That sent commodities diving again.
  • Europe saw a really sharp market sellof in the early going, but that abated a bit by the end. Of possible interest is that during the worst of it, the “core” (Germany, France) were underperforming the periphery. 
  • At 8:30, the US got a trifecta of mediocre news. Initial jobless claims were a bit worse than expected. PPI was hotter than expected, and retail sales were slightly lower.
  • But the market didn’t care. It was already down, and didn’t get any worse. Eventually it stabilised and started to bounce back. That was the case for commodities too. Oil went back over $100. Silver came nearly back to flat, before diving hard in the final hour.
  • The general theme: Equities are whipping commodities. Paper is beating rock.
  • In terms of specific names, there was some big time selling in Chinese net stocks (RenRen, SINA). Cisco fell 5% after bad earnings, and Goldman Sachs got slammed after some downgrades due to increased legal concerns, and a brutal article from Matt Taibbi. So the other theme, besides paper beating rocks: Lots of beta-ish stuff looking bad.
  • For an interesting look at energy, see here >

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