(As of 7:20 am PST)
Stocks are down after enjoying a short break yesterday as
investors looked ahead to the Fed decision and also fears of Turkey and other
emerging market economies. Late Tuesday,
the Turkish central bank announced an aggressive interest rate hike in an
attempt to shore up the Turkish lira which has been on a slide since the
beginning of January. The immediate
boost from the policy change was short-lived however. Stocks in Europe and the US rose as did the
Turkish lira, but since have come tumbling down. European markets are in the red to the tune
of 1%, while US indexes are also lower by 0.5%.
The emerging market selloff which caught headlines last week after
China’s disappointing slowdown has now bled over into currency risks which
are adding to the negative sentiment.
Add to the mix uncertainty about the Fed’s taper decision to come later
today and you have a recipe for market volatility. Sure enough the VIX (market fear gauge) is up
12% today. Mixed corporate earnings from
names like Boeing, Yahoo, and Dow Chemical are also hitting headlines
today. Gold is higher by 1% and the US
dollar lower as interest rates continue to slide with the 10 yr. looking to
break through 2.70%. Looks like another
volatile trading session today.
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