Markets Around The World Getting Smoked — Dow On The Verge Of Falling Below 15,000
Markets across Europe just closed at their lowest levels of the day.
The London FTSE 100 fell 2.1%, the French CAC 40 fell 1.9%, the German DAX lost 1.2%, the Spanish IBEX 35 retreated 0.9% and the Italian FTSE MIB fell 1.0%.
European markets are now trading at six-week lows.
Meanwhile, in the United States, the Dow Jones Industrial Average is down 1.2% (off 180 points), and is now trading at 14,991.
The S&P 500 is down 1.1%, and the NASDAQ is 1.0% lower. All three are trading at their lowest levels of the day.
The S&P 500 is trading around 1617 this morning, 4.1% off its peak level of 1687 turned in on May 22.
Markets Now In Triple-Digit Loss Territory
After this morning’s economic data releases.
The gold trade is just not working
UBS CIO Warns Of Japanese “Abegeddon” Scenario
Last night’s over-promised and under-delivered ‘third arrow’ from Abe appears to have solidified market opinions about the chances of Abe slaying his deflation-monster nemesis. UBS’ CIO Alex Friedman fears that Japan may face a fearsome stagflation – where accelerating inflation in asset prices is not met by higher growth rates – a scenario he calls “Abegeddon.” In an “Abegeddon” scenario, Friedman said “investors may grow increasingly concerned about the sustainability of Japanese debt levels that could lead to a ‘stampede’ out of government bonds.” With Nikkei 225 futures having faded their European morning bounce and pressuring back towards the 20% ‘bear market’ correction levels once again, it seems the ‘stampede’ is out of growth-expectation-driven equities as JGBs are bid for now. That bid (no matter how hard the BoJ tries) is unlikely to last if the doubt grows as Japan’s debt-to-GDP would rise above 300% (from 226% currently) and the 10Y JGB yield could approach 5%!
USDJPY < 99
Dow Jones Drops Under 15,000
Dow 15,000 hats off.