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16th October 2014 - Global Market Sell Off Continues
Major Indexes:
FTSE 100 6,211.64 (-2.83%)
Dax 8,571.95 (-2.87%)
CAC40 3,939.72 (-3.63%)
Nikkei 14,738.38 (-2.22%)
Hang Seng 22,976.41 (-0.71%) Dow 16,141.74 (-1.06%)
NASDAQ 4,215.32 (-0.28%) S&P 1,862.49 (-0.81%)
Markets globally have continued to see declines as the US saw volumes and volatility not present in the indexes for nearly 3 years. The VIX increased 15% to finish the day at 26 and the S&P 500 very briefly went negative for the year, only to recover.
After a strong run of data on the expanding US economy, yesterday saw a slight reduction in Consumer Spending which fueled enough concern to see a continuation in what many are calling an overdue correction. Dropping by just 0.3% the data immediately raised flags that the expansion seen so far this year in the US could not be as strong as previously thought and that the global economy is in far greater danger of reaching deflation than many had considered. The US markets should ease off on the declines later today, however there is just as much chance another volatile day could see serious damage to the gains made so far this year.
In Europe it was a bleak day as the majority of markets saw significant loses, largely due to the news from Germany that the government had cut their growth forecasts again for the year. This along with news that the UK, India and China were seeing inflation at close to 5yr lows added weight to the statement from the IMF recently that the Global recovery is by no way equal and that that Europe is in just on the verge of a major recession. European markets are expected to open flat today after yesterdays huge sell off.
Even positive data out of China couldn't help stem the outflows on Thursday in Asian markets. The Nikkei followed the US dropping over 2% though out trading. The Chinese Central Bank announced that lending had increased. Lately, there has been some criticism on how accurate the data released by the government is and how well it can be relied on.
One thing that has been learned this week is that finally the markets are paying attention to the actual state of the global economy and that Central Banks and their policies may not be large enough to deal with the global recession we could be facing. If geo-political tensions start to have an affect too, along with the current low price of oil, the markets could see this possible correction go deeper than any of us would like to see.
Stock Port Associates (SPA) is one of the world’s largest and most established offshore investment firms operating solely within a tax-favorable jurisdiction. SPA employs seasoned market professionals with expertise in all asset classes with access to all major markets. To find out more please visit http://www.stockportassociates.com for more information or contact info@stockportassociates.com to be contacted by one of our representatives.
DISCLAIMER The views, opinions, findings, and conclusions or recommendations expressed on this service are those of the author(s) and do not necessarily reflect the views of the Stock Port Associates.All market data within this release is for your general information and enjoys indicative status only. Stock Port Associates does not accept any responsibility for its accuracy or for any use to which it may be put. All share prices and market indexes delayed at least 15 minutes. 52 week high and low values are calculated from close price data.
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