Well, all eyes have been on the markets, today, to see if the slide from the end of last week would continue ….. and it did, sort of. It isn’t a free fall, in most places, but, it doesn’t answer any questions, either.
The “emerging markets” still took it on the chin, today, and others continued downward, but, less so.
Apparently, looking for any good news, much of the market latched onto Caterpillar’s news of beating estimated earnings. Which isn’t a surprise because Caterpillar seems to always do this. In the early part of the year, they’ll pronounce doom and gloom and lower expectations. At the end of the year, they beat the lower expectations. So, it was good news, but, not really.
When investors worry about global growth, they first pull back from riskier trades in emerging markets. That combined with concerns about specific countries — economic stability in Argentina and a political scandal in Turkey — to convince investors to sell off even more sharply. ….
Asia closed sharply lower on Monday, and for a time it seemed as though sentiment had improved in Europe and the U.S., where indexes opened higher.
But the increases proved fleeting. London’s FTSE 100 closed down 1.7 percent at 6,550.66. Financial stocks were hit after Royal Bank of Scotland warned its earnings would be hit by legal costs and charges.
The British index was also dragged down by a nearly 17-percent plunge in the shares of natural gas provider BG Group, which warned on its outlook due to turmoil hitting its Egyptian operations. Vodafone slipped nearly 4 percent after AT&T announced it was not interested in making an offer for the British mobile-phone service company.
Other markets fared better, but not by much. In Frankfurt, Germany’s DAX fell 0.5 percent to 9,349.22 while France’s CAC 40 shed 0.4 percent to 4,144.56.
The Dow Jones industrial average — which on Friday plunged two percent, its worst day since June — fell 0.4 percent to 15,816.11 despite upbeat earnings from Caterpillar. The broader S&P 500 was down a sharper 0.8 percent at 1,776.56.
Currencies took a hit ….
The Turkish lira hit a record low of 2.39 per dollar on Monday before recovering to 2.2889 per dollar after the central bank said it would hold an emergency policy meeting on Tuesday. The South African rand fell another 0.7 percent to 11.17 per dollar, and Russia’s ruble fell 0.6 percent to 34.73 per dollar.
Of course, the fall in established markets will be slower than the emerging markets, as some investors will move to more stable markets from the emerging. In other news …
Fortunately, the great economic acumen of the Euro bankers will prolly save the global economy, right?
It’s just around the corner guys!!!! Again.