After yesterday’s rapid sell-off, stocks around the world are headed down again, threatening to break the steady upwards and sideways movement of the last several weeks. Japan’s Nikkei fell 1% and the Europe-wide DJ Stoxx Index was off about 1.6%.
S&P Futures are down about 11 points, while the Dow may shed another 100. Of course, this is all very early, several hours before US trading opens.
Why the selloff?
Some think there’s growing concern that government may take the punchbowl away, a story that really started emerging last week, with news out ot the Fed that the quantitative easing may let up, with more Fed members starting to talk “endgame.”
Marketwatch: In Europe and Asia, commodity prices and related stocks were weak while the dollar was stronger, with many pointing to the weekend Group of Eight finance minister meeting in Lecce, Italy as the culprit. Top finance ministers said they would look to end unprecedented monetary and fiscal stimulus that has brought the global economy close to stabilisation after the credit crunch.
“The weekend meeting by the G8 and the focus on an ‘exit strategy’ is weighing on the futures this morning,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
No idea if that’s right, but it’s certainly the story of the last few days.