The Stock Market Is Falling Again: Suddenly Everyone’s Talking About The ‘September Angst’, Modest Retail Sales Miss Means Taper On Deck, Furniture Sales Slide

The Stock Market Is Falling Again

For the third trading session in a row, stocks are falling again.

This morning’s advance retail sales report caused a bit of selling in the futures at 8:30 AM ET, but the S&P 500 really took a turn downward when exchanges opened at 9:30.

Now, the index is down 0.4% from yesterday’s close to 1682, trading near its lows of the day.

If the market closes down again today, it will mark the sixth trading session in the last seven that stocks have fallen since the all-time high of 1709 on August 2.

The chart below shows S&P 500 futures this morning.



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Suddenly Everyone’s Talking About The ‘September Angst’

Here’s an interesting situation.


The market is acting really calm, not doing much of anything.

But everyone’s talking about the ‘September Angst,’ the confluence of big economic events that are coming up in just a few weeks.

This is from JPMorgan’s Early Look At The Market, put together by Adam Crisafulli:

There is a ton of September angst – the press over the last few weeks (but really in the last 24 hours) has been full of articles warning of heightened market volatility in Sept due to the Fed (tapering), Washington (the debt ceiling battle), and Europe (Germany’s Sept 22 elections).  S&P 500 Index Committee predicted a “very messy” Sept ( while strategists continue to warn investors of the potential for market disruptions (“How the S&P will lose 90 points”; ; “stars aligned for serious US correction”  Politico (early Mon morning) spoke of impending doom in Sept in Washington and lamented the lack of interest on Wall St in the upcoming disaster (  Even Europe, despite all the progress achieved, continues to worry a lot (a majority?) of people (“So you think Europe’s debt crisis is finally over? Time to think again”
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Modest Retail Sales Miss Means Taper On Deck, Furniture Sales Slide

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While today’s retail sales headline data was the second miss in a row (the “longest stretch” of misses going back to January 2012), printing at 0.2% on expectations of 0.3% (with last month’s 0.4% miss revised to 0.6%), the internal data was modestly better, printing at 0.5% ex autos (exp. 0.4%), and in line ex autos and gas which came right on top of the expected 0.4% increase. So overall, a wash report, and one which doesn’t tip the scales in either direction. Since this was the most important August report left ahead of September, any hopes the Fed’s taper would be delayed based on this data point can now be dashed.


DEUTSCHE BANK: Stock Market Confidence Is A Bit Too High, And We Don’t Know What’s Going To Happen Next

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Fresh sign that Fed is falling out of love with QE

There is more evidence that the Federal Reserve is falling out of love with asset purchases.

Economists at the San Francisco Fed Bank released a paper on Monday estimating that asset purchases, also known as quantitative easing, add only “a moderate  boost” to economic growth.

And that boost itself is dicey, as it really depends on the central bank promising not to raise short-term interest rates, the study found.

Goldman: “Without The Boost From Housing, Real GDP Growth Would Fall Below 1% This Year”

Wonder why the Fed and the banks are so desperate to reflate the second housing bubble, to the delight of flippers and taxpayer consequences (deja vu) be damned? Simple: as Goldman points out in a note released last night, “without the boost from housing, real GDP growth would fall below 1% this year.” That’s the revised GDP by the way, the one that now includes iTunes song sales and underfunded pension plans in the sumtotal. Which in reality means that ex housing, GDP would almost certainly be negative. So the bigger question is what happens to housing which has already seen a shock to the system following the surge in interest rates in the past month and which hobbled both homebuilders and mortgage applications? This is what Goldman sees there: “On house prices, we have started to see the first signs of deceleration and expect a slowdown from the 10%+ pace observed over the past year. Our bottom-up house price model projects 4-5% annual growth rate in the next two years.” Alas, since prices moves from top and bottom inflection point never happen in a straight line as everyone rushes to buy, or sell as the case may be, resulting in a skewed and pronounced move, once the reality seeps in that the artificial housing ‘recovery’ is over, watch what happens when everyone rushes for the door. That goes for GDP as well.


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