(as of 7:10 AM PST)
Stocks rallied at the start today with investors 'buying the dip'. It was more than a dip last week...more like a rout, with markets down 3.7% for the week, the largest weekly decline since 2011. Unfortunately, gains are evaporating quickly and it seems that the broad negative momentum from Friday's close is once again settling in. The decline in the price of oil seems to be a major factor in the decline. What seemed like a no-brainer economic boom to the US consumer is turning more into a negative macro-economic event with energy stocks plummeting and assumptions that capital spending with be hurt as oil drillers close up marginal new drilling and fracking projects. There are also rumors that end of year tax selling might be adding some downward pressure. I think the biggest factor is simply profit taking and consolidation as investors weigh in on record levels for most indexes which occurred just prior to this mini-correction. Oil is down slightly while gold is showing moderate losses. US interest rates continue their downward trajectory with the 30 year mortgage rates looking very attractive, near 4%. Anything less that a large rebound today will look more like a 'dead-cat bounce', indicating further weakness as the week progresses.
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