(as of 7:15 AM PST)
Shocks waves in Europe are big news with Switzerland surprising analysts and economists alike by abandoning a three year old cap on the exchange rate of the Euro to the Swiss Franc. The Swiss stock market crashed, down 10% and the rest of the global financial infrastructure is attempting to respond and adjust to the ramifications of the move. While Switzerland is relatively small compared to the global economy, its reputation as a financial refuge over hundreds of years, gives this move outsized significance. In the meantime, economists and analysts are trying to figure out how this move will affect global financial markets. One big beneficiary is gold, which is up $25 per ounce in morning trade. The US market has been volatile and is currently near even. A record consumer confidence number has helped pull up early losses. But jobless claims were up and the Philly Fed Index came in weak and below analyst expectations. These may be signs of layoffs in the oil industry as a result of cratering oil prices. Profit reports have been disappointing in the first week of earning season, particularly with US Banks. Most every market is expressing volatility as analysts try to digest the Swiss Central Banks very surprising move. Expect a negative day as investors cope with a weakening US recovery picture.
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