(as of 7:30 AM PST)
One hour into the trading session and already it has been a roller coaster ride. Surging at the moment in a rapid upward slope, indexes are pushing to near up 1%, but hold onto your hat, because we have already seen swings from a positive open to a sharp fall into negative territory, and who knows where we are going even as these words are penned. Volatility is the order of the day. Asian shares took a pounding over night, down anywhere from 1% to 3%, with China the usual suspect as fractures in the China economic model become clearer with each passing day. Europe is to the upside on some comments, yet no action, on the part of European Central Bank chair Mario Draghi, that he stands prepared to provide further economic stimulus. It is a strategy he has used in the past, where verbal commentary, lacking actual follow-up, is used as a tool to calm markets. It is becoming less and less effective as investors sense the lack of substance to the conversation. In the US, corporate profit reports are coming in mostly positive and economic data continues to point to a nascent recovery, but global macroeconomics are far outweighing US data. When we step back from the global chaos, the US picture continues to look very good, but there is concern that global problems might derail the strength of our economy recovery. Precious metals and oil are both falling again, with oil below $28 p/barrel, which should translate into even lower prices at the pump. Despite all, we expect markets to recover from this oversold condition and to finish the week on the upswing.
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