A global rout in equities drove the Standard & Poor’s 500 Index to its worst slump since February 2009, while two-year Treasury yields plunged to a record low amid concern the economy is weakening…The S&P 500 tumbled 4.8 percent to 1,200.07 at 4 p.m. in New York, a 12 percent drop from its April 29 peak and weakest level since November 2010…
Concern the global economy may relapse into a recession has driven investors out of stocks and into the relative safety of Treasuries, the Swiss franc and yen and is spurring speculation the Federal Reserve will start another stimulus program. Japan’s moves to sell the yen, which this week neared a post-World War II record, and expand an asset-purchase fund follows efforts by the Swiss central bank to curb the franc’s gains. The European Central Bank resumed bond purchases and offered banks more cash to stem the spread of the debt crisis.
“The mood right now is gloomy,” Mike Ryan, the New York- based chief investment strategist at UBS Wealth Management Americas, said in a telephone interview. His firm oversees $774 billion. “The burden of proof is for better data that show the economy is not falling into recession. Tomorrow’s payroll report is crucial. If we see another disappointment, the stock market will have significant downside from here…”
Gap Inc., the largest U.S. apparel chain, sank 12 percent after sales missed analysts’ estimates. DirecTV, the largest U.S. satellite-television provider, tumbled 5.7 percent after adding fewer U.S. customers than analysts estimated.
“It’s not a flash crash,” Michael Shaoul, chairman of Marketfield Asset Management in New York, said in a telephone interview. His firm oversees $1 billion. “It’s much more orderly and I don’t see any weird prints like we saw that day in individual issues. I still couldn’t tell where this market will bottom. I also don’t think this is 2008 when you saw a genuine failure of global finance to be able to fund asset process. You don’t see money markets going crazy. It’s a plain and simple liquidation of equities and commodities.”
There is little reason for confidence in the US economy – and even less in the European economy taken as a whole. RTFA for details – if you dare.
There is no reason to expect action on the part of Congress – especially the worms who think markets, commerce and finance are something that hasn’t changed since the end of the Civi War. And they would have been on the losing side there, as well.
Halfway measures from the Obama Administration never developed into infrastructure revival which would have produced jobs and employment for some of the “unemployables” stuck into double-digit unemployment. The Tea Party and Republican flunkies on the Right wouldn’t act, today, if called upon to enact the measures jointly agreed upon as bipartisan measures at the end of the Bush administration. I doubt if anyone expects them to join with Obama and the progressive Democrats who were elected while Blue Dogs were made redundant.
Chickens are coming home to roost, folks. If you voted for teabaggers, you’re witnessing the results of that foolishness. If you voted to reelect slugs like Boehner and McConnell, the Coburns and Ryans of Congress – prepare to start shoveling chickenshit, right now. It will be the only job you can get.
ADDENDUM: A few folks have asked “what should I buy on the way down?” I don’t give stock advice at my personal blog. Yeah, with just a little cash at hand, I bought a little bit today – and anyone who knows me really well knows there’s just one more equity I’m waiting to get low enough to grab a little more.
Do I think we’re heading into another recession? Damned if I know. I’ll be happy when my social security check arrives this month. 🙂