Roundtrip for Market Indices
Only 19 stocks in the S&P 500 traded higher on Friday, and today is not shaping up to be that much better.
Marts around the globe are getting shellacked:
The Morgan Stanley Capital International World Index lost 1 percent to 1,611.29, while S&P 500 futures declined 0.5 percent to 1,498.2 at 8:46 a.m. in New York. More than 11 stocks fell for each one that rose in the MSCI World and all 10 industry groups in the measure retreated. European stocks dropped to a four-week low, while shares in Asia slid the most in two months.
Shares in emerging markets slid for a third day, with the MSCI Emerging Markets Index dropping 2.2 percent to 1235.21. Bloomberg
Caterpillar’s cautious words on the U.S. economy spooked market participants, and some states like Michigan are clearly in contraction. Soon, the rest of the country might follow. But will the rest of the world follow? The G7 is meeting, and are warning that they are beginning to see wobbles:
``Recent financial market turbulence, high oil prices and weakness in the U.S. housing sector will likely moderate’’ the global expansion, officials said in a statement.
The gains the market witnessed since the Fed moved in mid-September have largely evaporated. There was a good trade out there in mid-August, but the game has changed once again. Even copper is trading lower, and perhaps crude will finally take a hit.
The G7 are not the only folks concerned, and the Chinese are getting in on the act, urging the U.S. to get its act together:
A senior Chinese official urged the international community on Saturday in Washington to analyze the root causes of the recent financial turmoil and to make efforts to safeguard global financial stability.
“Activities in the major advanced economies slowed in the second quarter of 2007, posing significant downside risks to global growth,” Wu Xiaoling, deputy governor of People’s Bank of China said at the 16th meeting of the International Monetary and Financial Committee.
Credit market retrenchment in the United States may further dampen the housing market, suppressing consumption and investment, giving rise to potential risks of recession with a spillover effect on other countries, she warned.
They might be communists, but they are making a call on the contagion, and look for more pain ahead for capitalists worldwide:
“This round of adjustment has not yet come to an end,” Wu said. “Despite the major central banks’liquidity injection, credit conditions are unlikely to be restored within a short period of time.”
The weekend weather on the east coast was a nice distraction, but it is white knuckle time again for fund managers.
An apple a day might be sage advice, but Apple’s (AAPL-NASDAQ) earnings are unlikely to prop up the entire tape. Although we have given up quite a bit of ground very quickly, and of course the negative pundits are out in force. Time for a bounce? With 240 of the S&P 500 reporting earnings this week, rest assured that most folks will be working long hours this week.
Global Stocks, U.S. Futures Drop; BHP Billiton, Toyota Decline
Bloomberg
China calls for efforts to analyze financial turmoil, safeguard global financial stability
People’s Daily Online
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