The major stock markets have continued to take it on the chin. While government officials try to wish away this sell off one of the factors driving the escape from equities is likely the fear that Central Banks are going to shut off their cheap money supply. While economic growth remains challenging and miniscule, Central Banks (read the Federal Reserve) have put themselves into positions in which if they don’t bite that their barks will not be heeded.
Some analysts have taken on the approach that investors are taking a breather and refuse to declare the end of the bull market. But evidence is starting to build that Wall Street is starting to evaluate values in a landscape in which money is not necessarily ‘free’.
Data from the States yesterday continued to show signs of questionable economic progress. The ISM Manufacturing PMI reported a 51.3 outcome which was significantly below the estimate of 56.2 and last month’s reading of 57.0. Total Vehicle Sales were also down last month. The U.S. will release Factory Orders statistics today.
Asia has continued the sell off in equities early this morning. The Nikkei has had a huge slide. And the Hong Kong Hang Sang has not done well. Gold has climbed back to a very interesting resistance level. As of this morning the precious metal is near 1256.00 in a fast market. Considering the volatility that has been seen in global bourses, trading in so-called safe haven assets such as Gold will get plenty of attention. Unfortunately for those who want to climb into Gold it will have to take into consideration that it has been within the grasp of a bear market for over a year now.