The global stock selloff intensified today as investors sold shares across all sectors and sought safety in government bonds and gold.
Although it feels like we have to go lower before we can flush all this negative sentiment, the market did manage a 15 handle rally on the SPX toward the close. Not a big deal, but at least it didn’t flush out on the lows.
As you know, many are watching the 1812 level on the SPX for support. It did breach that today as it tested 1810. I would feel better if it went down and tested the 1790 area. That’s the 200 day moving average on the weekly time frame.
Financial shares dropped around the globe. The sector led the S&P, as insurance stocks got hammered. Europe’s banks also weighed on the region’s market, with the sector falling 6.3%, bringing its losses for the year to nearly 29% amid uncertainty around interest rates, nonperforming loans and turmoil in emerging markets. What a freaking mess. Naturally the markets are worried that this could become a systemic issue.
Everyone is waiting for the ECB to push its deposit rate deeper into the negative. It would do wonders for short sellers.
The Hang Seng China Enterprises Index, which tracks mainland Chinese firms trading in Hong Kong, plunged 4.9% to its worst level since the Financial Crisis. This was the first day that Hong Kong traded after a few days off. The main China market opens next week. We will be closed on Monday.
Speaking of financials, the XLF blasted through its weekly 200 day moving average support this week.
I’m sure Janet Yellen is a lovely lady and makes a mean brisket, but lately she really does seem over head almost to the point of cluelessness. I”m sure the markets see this too. Out of bullets…..and answers.
See you in the morning
Joe