The Closing Look
Stocks fell on Tuesday as global selling continued on sluggish global economic growth. Japanese and European stock markets fell after the IMF warned of a global economic slowdown. Overnight, India’s Central Bank joined the easy money party and lowered its key interest rate to 6.5%, from 6.75%. Meanwhile, Australia’s Central Bank held rates stead. In the U.S. the PMI Service index rose to 51.3, higher than the prior reading of 49.7 and just above the boom/bust level of 50. The ISM service index came in at 54.5, beating estimates for 54.
Gary’s Thoughts: Icky day! Massive overhead resistance. Overbought. Bears turned into bulls. We shall see. We said on radio yesterday to watch closely here. Not thrilled with action in Financials. Not thrilled with Asian and European markets aas they are now waaaaay underperforming U.S. markets. Something to watch. Just keep in mind, we are 99.9% sure Yellen going to lower rates back to 0% and then print again. Just a matter of when!
I think it is that threat of the US lowering and printing that is causing Nikkie and Europe to underperform as they are heavily dependant on weaker currencies Vs the Dollar.
I feel we are at the stage of where easing compounds the problem.