This is three hard down days in a row. Where’s the Bernanke Put?
But first, the scoreboard:
S&P 500: -18.68
And now the top stories:
- Where to begin? Probably last Friday, as today felt almost like an exact replay, starting with a mega decline in Shanghai on inflation and tightening fears. That, of course, lead to massive selling in all of the industrial commodities, which prior to QE had been rallying like crazy. Add in the emerging dollar strength, and you had the brew for a drubbing all around.
- One other key event to note out of Asia: Korea hiked rates. The tightening is not confined to China by any means.
- There were a ton of headlines in Europe today, and yet, not actually any news. Mainly it was a lot of back and forth and conflicting lines regarding Ireland, which insists that it’s OK and funded through the middle of next year. However developments could come any moment, especially with the European Financial Ministers meeting in Europe. At one point there was talk about Austria not wanting to pay into the Greek bailout, and Greek CDS skyrocketed. Click here for updates on the developing European story >
- Heading into the US, the shellacking in China pushed US futures down in the pre-market. At 8:30 we got a surprisingly cool PPI number, which was hard to reconcile with rising commodity costs, but at least it seemed to give the Fed more breathing room regarding QE. 45 minutes later, industrial and capacity utilization came in a little subdued on the headline, however the internals were actually pretty decent, showing ongoing growth in manufacturing.
- Also pre-market we got some late-straggling earnings reports: Wal-Mart beat its expectations, almost entirely thanks to growth in Asia. The domestic business was garbage. Home Depot turned in a fine, but uninspired report, with a lot of focus on “cost controls.”
- Of course, you can’t talk about today without talking about the collapse in commodities, which includes soft commodities, industrial commodities, and the precious metals. Gold ans silver got bludgeoned, proving once again that a hedge against market chaos, they are not. The currency market was also fascinating, because despite all the chaos in Europe, the euro didn’t lost much… in fact it was up against the Swiss Franc and Japan.
- One bit of good, though in a very second derivative way, is that the muni debt collapse stalled out early, with the closely-watched MUB ETF — bouncing off its early lows.