It is raining here today, and it is only the second time it has rained since I arrived in Spain some six weeks ago. The sky is threateningly grey and right out my window, the Mediterranean Sea is churning. I can see rolling water trying to shape up into big waves, but it can’t quite get there. Each nascent wave grows and then falters, leaving only a small bit of white foam behind. It is actually quite beautiful, waves breaking in open water, never making it to shore to crash upon the sand …
How about that almost wave yesterday in the market? China did play in the action. Along with all the Yeh, Yeh news about China’s slowing growth “the mining giant BHP Billiton warned that Chinese demand for iron ore — used to make steel — was flattening.”
The European markets are off today and the Asian markets all chimed in with their responses to the now old and repetitive fear that China is crashing economically. The Nikkei Index dropped and the Hang Seng Index dropped, but the Shanghai Index rose. What’s up with that?
Over the past few weeks, stocks have been buoyant as U.S. economic figures were upbeat and concerns over Europe’s debt crisis eased. Many stock indexes are trading at multi-month highs, while the main U.S. markets at their highest levels in nearly four years.
This is what will play, ultimately, and until this sentiment changes, or the geopolitics of the world assume command, expect more of what we have had since October. Then again, the market has a funny way of tripping up my logic. Now that I think about it, the mere 68-point drop in the Dow really is not much of a correction. Actually, thinking about it even more, the flat finish of the NASDAQ and the S&P 500 dropping only four adds to the impression that a bigger bite out of the gains since October could be coming. The market is sitting at such lofty levels any breeze offers an excuse to fall.
Investors have grown skeptical that more gains can be sustained in the near term.
Yet, U.S. stock index futures are up as I write, presumably on the preemptive data about the US housing market.
The number of Americans who bought previously occupied homes likely increased in February to the highest level in two years.
Perhaps (adding to the data above), the positive spin out of Britain as its rolls out its 2012 budget is helping sentiment.
The British economy looks set to avoid a renewed recession and the recovery will pick up speed next year, finance minister George Osborne said in his budget statement on Wednesday.
Whoa! I completely lost sight of China and its economy crashing hard. Maybe that’s understandable as, aside from the rehashed news about China’s slowing growth, blah, blah, blah, the only news from China is the government is making the lawyers vow allegiance to the communist party. Does that still exist in that quasi-capitalist country?
The rain is still falling, but not hard, and the waves on the sea are not quite as many, nor are they as big as they were just a bit ago. The white foam is almost gone, only appearing now and then.
Trade in the day – Invest in your life …
