Wednesday, October 15, 2014

Economic Journal - Wednesday, 10/15/2014

(As of 7:20 am PST)

Stocks are plummeting at the open as disappointing data added to the already negative tone on Wall Street this morning.  Falling more than 2% at the open, the main benchmarks have crawled back slightly but remain significantly lower on the day. In economic news, a report on manufacturing showed the Empire State index falling sharply in October, well below expectations. Retail sales also fell more than expected while wholesale prices declined, missing expectations. Later this morning the Fed’s Beige book will be released, with expectations that the Fed will indicate an improving US economy. European markets are getting pummeled today, slipping into correction territory from a ‘technical’ standpoint as fears of a global growth slowdown continue to batter the fragile euro-zone. Asian markets closed higher on the day, perhaps on the heels of yesterday’s market action in the US. All told, it’s a risk off day that has money flowing to ‘safe haven’ assets at a remarkable pace. The 10 yr. treasury yield fell below 2% for the first time in 16 months as prices rose on demand for the safe government debt. Gold is higher and oil continues its downward spiral adding to concerns over deflation. It’s a perfect storm for markets with fears of global growth slowdown, unwinding of central bank policy and geopolitical tensions causing panic in a market that has run up to record levels.

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