(As of 6:37 am pacific)
The European economic scene
shifted from a sea of tranquility to a storm tossed ocean in a very short
period of time. Volatility is
skyrocketing as investors try to measure a number of stories coming out of the
Euro-zone. Spanish yields are up amid
political jockeying over a Euro bailout plan, while the affluent Spanish State
of Caledonia is preparing a referendum on secession from Spain. Peripheral stories from Greece and Italy have
investors further on edge. A Federal
Bank governor issued a statement questioning the wisdom of QE3 and its open
ended commitment. We are in a 'risk off'
scenario as the dollar is strengthening in a flight to safety and most
commodities and other investments are down.
Oil and gold continue their drop from yesterday. One beneficiary of the flight from risk is
that interest rates are down, including mortgage rates, which are near historic
lows. US markets opened surprisingly stable
in spite of the flurry of negative momentum, but don't expect a positive home
sales number to overcome global worries.
Expect a volatile, but eventually negative day on Wall Street.
