Posts
Yesterday the Sydney Morning Herald was crowing. "What crisis?" they asked. The Sydney market was up and the gung-go Aussies were busy buying up bargains. \
The headline was -
The headline was -
This morning on a quick perusal I couldn't find anything on the subject. Go back to sleep.
RT (which is often up to the minute in its reporting) had this as its headline
Global stocks surge as China cuts interest rates
To which, Radio NZ chimed in -
New Zealand deputy -PM and Minister of Finance (and pickpocket) Bill English thought it was all " a bit concerning" although everything is fine with the Chinese economy and there's an excuse for everything.
It's odd, I thought, that all the free market people are, all of a sudden, in favour of interventionism, especially by the Chinese. Go figure.
However, as I was taking all this in the trading day on Wall Street was ending with a surprise.
Dow Plunges Back Below 16,000 - Dead Cat Bounce Dying
"Off
The Highs" -
hope is fading fast as The Dow is now down over 350
points from its pre-open highs after
the China rate cut and has broken back below the crucial 16,000
level...
Charts:
Bloomberg
US
stock market gains wiped out to close second volatile day on Wall
Street
Dow Jones
ends day with big losses after initially appearing to bounce back
from ‘Black Monday’ of global sell-offs, sparked by China economy
fears
26
August, 2015
US
stock markets continued to seesaw on Tuesday following a day of
global sell-offs sparked by fears that China’s economic boom is
slowing.
The
Dow Jones industrial average initially appeared to be bouncing back
from “Black
Monday”
– a day when it crashed more than 1,000 points before ending the
day down 586 points.
By
noon the Dow was up over 300 points as European markets closed up and
investors reacted positively to China’s decision to cut interest
rates. But the Dow closed 205 points down, or 1.29%. The S&P 500
ended the day down 25 points, 1.34%, and the Nasdaq closed 0.39%
down.
The
second day of drama came after investors continued to sell in China.
The benchmark Shanghai composite index closed 7.6% lower on Tuesday
following an 8.5% drop on Monday. Over three days the index has
fallen 22%.
European
markets reversed Monday’s losses but
will be closely watched on Wednesday for reaction to the US news. In
the UK, the FTSE 100 ended a 10-day losing streak to end up 3%,
Germany’s Dax was up 5% and in France the CAC rose 4%.
US
stock prices were initially buoyed by some positive economic news.
The Conference Board’s consumer confidence index, which had
declined in July, rebounded in August. The index now stands at 101.5,
up from 91.0. The Commerce Department said new house sales rose 5.4%
in July, slightly less than expected but still indicative of recovery
in the housing market. Home resales jumped to a near
eight-and-a-half-year high in July.
Ken
Goldstein, economist at the Conference Board, said he expected more
volatility to come in the financial markets despite Tuesday’s
rally. “There’s nothing particularly new here,” he said.
“China’s economy is slowing, we knew that.
“Somebody
woke up last Thursday and headed for the exit and a stampede was on.
Now they are back again,” said Goldstein. “It doesn’t say much
about our financial geniuses.”
Goldstein
said consumers could be affected by the stock market wobble, which
could trigger a lack of confidence ahead of the all-important holiday
season despite relatively good economic data on housing, jobs and
manufacturing. “The more we scare the bejeezus out of the consumer,
the more risk we face,” he said.
The
morning rise comes after three days of falls on stock markets around
the world that erased close to $3tn globally.
China’s
central bank cut interest rates and eased borrowing requirements for
banks amid the continuing fall. It was the fifth rate cut since
November. Earlier this month China
devalued its
currency in a move aimed at reviving its slowing economy.
A
slowdown in the world’s second-largest economy has rattled
investors worldwide. The White House sought to reassure investors on
Monday as the selloff continued. “There is no doubt the global
economy is more interconnected that than it ever has been,” Josh
Earnest, Barack Obama’s chief spokesman, said. “What I would
encourage people to evaluate is the ongoing strength and resilience
of the US economy.”
The
People’s Bank of China said: “Currently, there are persisting
downward pressures on the country’s economic growth. There has also
been quite large volatility in global capital markets recently, and
monetary policy tools need to be applied more flexibly.”
Gus
Faucher, senior macroeconomist at PNC Financial, agreed volatility
was likely to continue but the recent falls had been “overdone”.
“We’ve had a six-year bull market and I’m not surprised to see
a correction, but the domestic fundamentals look pretty solid,” he
said.
The
fall in stock markets comes as the Federal Reserve weighs
its first hike in US interest rates since the recession.
Paul Ashworth, chief US economist of Capital Economics, said it was
too early to speculate on whether the market turmoil would delay any
rise.
“There
are no signs of any major downturn in the US economy, economic growth
in China still appears to be slowing rather than collapsing and
emerging markets are not about to endure a repeat of the 1997-98
Asian crisis. The current bout of market turmoil, if it continues,
might persuade the Fed to hold off on raising interest rates in
September. Since that volatility doesn’t reflect any genuine
economic slump, however, we wouldn’t be surprised if it proved
short-lived leaving the way open for the Fed to begin raising rates
at some point this year,” he wrote in a note to investors. “Even
a September rate hike is still a significant possibility if the
turmoil abates over the remainder of this week.”
But it's the poor that lose out - ALWAYS.
How
much did the world's richest lose yesterday?
26
August, 2015
The
world's 400 richest people lost US$124 billion amid yesterday's
global share market tumble, according to Bloomberg's Billionares
Index.
Monday's
decline in the 400's on-paper wealth follows last week's collective
fall of US$182 billion, Bloomberg reported.
Bloomberg
has reported that the wealth of 24 of these individuals - including
Amazon founder Jeff Bezos and Microsoft's Bill Gates - fell by more
than US$1 billion each on Monday.
Russian markets
The
Russian ruble has fallen to its lowest level since February against
major currencies, dragged down by both weak oil and Chinese stocks.
The ruble was trading at over 71 rubles against the US dollar and
81.78 rubles against the euro as of 09:25 GMT.
RTS -6% Gazprom -7.4% Lukoil -6.4% Novatek -5% Sberbank -7.4% VTB -6.11% $Ruble 71.28 Is@GoldmanSachs still buying? pic.twitter.com/15hda3mHLJ
— Russian Market (@russian_market) 24 Š°Š²Š³ŃŃŃŠ° 2015
Equity
markets in Moscow are in the red with the RTS losing 5.51 percent and
the MICEX down over two percent as of 09:25 GMT.
Listen to this nonsense from RT
Latin America
Latin
American stock markets mirrored the downtrend, plunging to their
lowest in 22 years, according to Bloomberg. The JP Morgan Latin
America Currency Index (LACI) reached its lowest level since November
1922 on Monday.
Colombia’s
peso suffered its most severe drop since 2009, falling 3.3%, to a
record low of 3.2 against the US dollar. It was joined by Mexico’s
currency, which decreased by 0.7 percent to 17.1. The Brazilian real
weakened by 1.1%, sliding to a 12 year low of 3.5.
The
Ibovespa Brasil Sao Paulo Stock Exchange Index (IBOV) continued last
week’s decline, sliding 3.9 % on Monday to reach its lowest level
since January.
RT on the Chinese economy
The
real Chinese economy has been showing signs of slowing growth. In a
report published last Friday by Caixin and Markit, it became clear
that manufacturing has been losing momentum. The Purchasing Managers’
Index (PMI), its key indicator, saw a fall to 47.1 from 47.8 in July.
This is the lowest level since March 2009 and shows a contraction.
No comments:
Post a Comment
Note: only a member of this blog may post a comment.