Things were OK earlier, but in the last couple of hours, markets have crumbled somewhat.
Dave Lutz of Stifel, Nicolaus recounts what happened just before 6 AM, when things started to follow apart:
…Futures were having a nice morning till around 5:45AM, when almost $1.4B printed in DAX and ESTOXX futures – knocking the DAX off almost 2%, and taking US futures down 50bp. No headlines associated, but no recovery when Germany’s Factory Orders printed better (despite bearish chatter). We “Hear” that a heavy buyer of DAX futures between 7800 and 7850 on Monday got stopped out at 7800, and lighter single stock volumes could not support the weight. There was nothing in Credit or FX to correspond to the move. Hang Seng closed down almost 3% as the market for live birds in Shanghai had been shut down on Bird Flu spreading, and Kospi lost almost 2% on Korean Rhetoric, Won action, and Auto recalls. Nikkei jumped another 2.7% as the Yen hits 3 ½ year lows, and their 30Y looses another 20bp.
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