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From Nomura, here’s the general thinking about why markets are diving this morning everywhere:It seems that the negative sentiment was sparked by news that IMF requires further austerity measures in Portugal, weaker earnings including Apple and Amazon and the S&P downgrade of France’s biggest banks. The agency cut three institutions – including BNP Paribas (from AA- to A+) – and lowered its outlook on 12 others, including Credit Agricole and Societe Generale citing increased economic risks. Note that S&P also cut its French GDP forecasts to close to zero in 2013-14 and revised its economic risk score on the sovereign from 2 to 3. This is similar to Nomura’s house view.
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