Broad stock-market decline is gathering momentum
The continuing decline in the broad stock market, as represented by the Standard & Poor’s 500 Index, is gathering momentum. The picture appears to have completely changed from what had existed between last November and the top in mid-May.
Now, rallies are sold and have no staying power. Even so, everyone is well aware that there is supposedly a large community of “under-invested” accounts — both professional and retail. If that is true (I have my doubts), then they are getting the pullback they supposedly wanted, in order to buy stocks. So far, they haven’t been aggressive enough, even if they are active, to halt the decline.
Nikkei Plunges 6% to Re-Enter Bear Market
Uncertainty over central banks rolling back stimulus saw the dollar/yen drop below the key 95-handle, hitting a new 10-week low. The Nikkei index is now down 21 percent from last month’s five-and-a-half-year high of 15,942, placing the benchmark index firmly back in bear market territory.
Elsewhere in Asia, Chinese markets experienced a bout of heavy selling with theShanghai Composite down over 3 percent after being closed since last week. Seoul shares fell over 1 percent fell to a new seven-week low and Australia’s S&P ASX 200 hit a fresh five-and-a-half-month low.
Oh, And Now China’s Tanking Too…
As such, the Shanghai Composite is off over 3%.
The Shanghai Composite, via Bloomberg.com
In One Chart, You’ll See Why This Japan Situation Is Putting Speculators In A Whole World Of Hurt
As this chart from Nomura shows, shorting the yen has been a wildly popular trade among speculators, as net short positions (red line) against the yen are near their most extreme levels in years.
S&P Futures are below 1,600
World Bank Cuts Global Outlook as China Slows, Europe Contracts
The World Bank cut its global growth forecast for this year after emerging markets from China to Brazil slowed more than projected, while budget cuts and slumping investor confidence deepened Europe’s contraction.
Bonds, Stocks, Dollar Pounded In First Dow Jones Three-Day Losing Streak Since 2012
It was bound to happen: after the Tuesday “winning” streak was lost 8 days ago on the 21st unlucky week, it was the turn of the “BTFD mentality” that had prevented a 3-day losing streak in the Dow Jones since December. And while today’s selling was still somewhat contained, it did not prevent the DJIA from closing below the psychological 15,000, sending GLPer Zazz directly to the hospital suffering from severe panic attacks.
Thursday could be bumpy, as rising interest rates continue to shake up markets and traders watch foreign exchange markets with a wary eye.
“It’s a trade of reallocation. Money moving out of asset classes into other asset classes causes that kind of volatility and lack of liquidity,” said Paul Hickey of Bespoke. He said he expects to see a stock correction in the single digits at most. “This kind of activity is the kind of activity you see when the market is going down.”
This Is What Crisis Feels Like…” Then it all changed. Literally within a day.”
On December 1, 2001, Argentina’s economy was in trouble. Unemployment was high, debt was high, and recession had taken hold. But life was somewhat ‘normal’. Basic services still functioned. And no one had to really worry about… food. Or water. Then it all changed. Literally within a day…
Bank Of England’s Haldane: “We’ve Intentionally Blown The Biggest Bond Bubble In History”…(Next Phase, BOOM!!)