Markets were clobbered, but… it actually could have been worse.
But first, the scoreboard:
S&P 500: -14.6
And now, the key stories:
- An argument could be made that the “day” started Wednesday evening with Cisco’s ugly earnings. Or you could argue that everything is a spillover from last week’s QE. But for simplicity’s sake we’ll just start the day in China, where stocks plunged 5%. Why did they plunge? Take your pick: There are rumours of tightening, concerns over the G20 and the currency war, bubble fears, a Goldman downgrade, you name it. The rest of Asia was hit pretty hard, though not quite so bad.
- As for Europe, well, obviously the Asian contagion had a negative effect, and yet the news was someone more bullish. German leaders are walking back their rhetoric about Irish bondholders taking a haircut (that was a misunderstanding!). Irish yields came in very sharply, and there was a lot of talk early in the day about bailout discussions. Definitely watch Ireland over the weekend to see if anything materialises. Click here to
- In the US, the very-very early action was quite negative. Then in in the very early morning things got a little better, though still down. By the time the market opened things were a bit better, and actually at one point it looked like things might go green.
- But in the mid-day the wheels fell off, and it seemed the dam might really burst. Now it’s important to note that along with the wobbly equity markets, there was some serious selling on the commodity front. Across the board, holders of things like gold, oil, wheat, and soy got smacked upside the head, as the air got let out of some extremely frothy markets. It felt as though the QE trade was blowing up. Did we mention gold and silver got crushed? Well, they did. So much for them adding to your diversification.
- Late in the day, however, the selling moderated a bit. We never had a full-on crash in equities, but we are putting together a real losing streak. Particularly worrisome for bulls is the collapse of some muni bond funds, as investors fret about state and local finances, and the slim odds of a bailout. Have a restful weekend.
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