If they drop today (as the article says) another 3 or 4 %, they'll still be above what they were last Sept. while continuing a 30+% drop started last April. Now if Iran & Arabia start shooting....
Posted on 01/04/2016 2:31:36 AM PST by expat_panama
Risk aversion prevailed throughout Asia as Saudi Arabia severed diplomatic ties with Iran on Sunday over the Kingdom’s execution of a prominent Shiite cleric Nimr al-Nimr. The Brent crude rose over 2% in early Monday morning hours but narrowed to 1.6% gain recently. In times of uncertainty, currency traders crowd to the safe haven yen, prompting the Japanese currency to rise 0.6% to 119.47. As a result, the exporter-dominated Nikkei 225 slumped 3.1% today.
Adding more chills, China disappointed the market by not announcing any reserve ratio cuts over the weekend, even though December manufacturing PMI continued to point to economic weakness. In addition, the People’s Bank of China guided its yuan fix rate below 6.50 for the first time since May 2011. Does it mean Beijing is willing to tolerate an L-shaped economic trajectory? The offshore yuan slumped 0.7% to 6.6171 and the onshore yuan fell 0.5% to 6.5187.
The new A-shares circuit break, which comes into effect today, is already immensely useful. At 13:12, the CSI 300 Index fell through the 5% mark, causing the Shanghai market to pause trading for 15 minutes. When the Shanghai market resumed trading, the benchmark index fell through the 7% mark, causing the Shanghai market to finish trading for the day.
According to the new circuit break rule, a breach of 5% either way would cause trading halt for 15 minutes. If the main indices fall through 7%, the market closes for the rest of the day.
In 2015...
(Excerpt) Read more at blogs.barrons.com ...
If they drop today (as the article says) another 3 or 4 %, they'll still be above what they were last Sept. while continuing a 30+% drop started last April. Now if Iran & Arabia start shooting....
Good morning --albeit a heck of a way to begin the new day/month/year!! Stock futures are pooping out at over a % down while metals futures are up 0.87%. FWIW, energy futures are ballistic (oops, wrong word today) at +2.57%! One half hour into trading we get Construction Spending and ISM Index.
If January turns out crummy there are folks who believe the affect will last for the year, and if they believe it hard enough it'll be true.
Very rough sledding coming.
Sentiment does not favor the first trading day of the year anyway so look for a possible positive reversal day in the S&P 500 and a continued upward journey to a new higher high.
Heading into work early today to get my limit orders ready for T, SO, D, GE, CAT, XOM, COP, CVX, PEP, DIS, NFLX, etc.
Can enyone give a breif (but real, informative, not wise-a**) explanation of what some of terms used in the above article mean... the obvious gist seems to be that we’re all headed for an economic slump of large proportions... but we need an interpreter here.
China, the US, or all markets?
China can’t afford its military expansion.
Us markets for sure. China is off like 17% for 2015.
ymmv
DANGER! DANGER! Plunge protection ready. Circuit breakers ready. Barry & Janet aka FEDGOV & FEDRES have got your back.
(sitting on the sidelines for the 8th year now. good speculating to savvy FReepers)
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This ought to be interesting. The drama. Happy New Year.
Maybe not, my experience is that whenever an 'expert' (be they a doctor, lawyer, financeguru, scientist, whatever) is not able to say what they mean with simple words, that's a clear sign that the speaker really does not understand the subject. Still, it's always fun to find out what's making the in-crowd run around in circles so this is what I'm getting:
"China disappointed the market by not announcing any reserve ratio cuts over the weekend..."
It seems the China's reserve ratio is (from here) "fraction of customer deposits and notes that each commercial bank must hold as reserves (rather than lend out)".
Beijing is willing to tolerate an L-shaped economic trajectory?
My guess is it's a number/graph geek think, iow the econ goes splat. My point is that it's not to hard to make sense out of these pundits, and it doesn't hurt to know what they're thinking about, but it's no guarantee that we're get any clear decisions/info out of it. Of course, that's always our job anyway.
At opening major indexes are down a couple %. OK, so the rally needed a breather anyway.
huh, tx!
Well, that’s good news any way. That is until their two million man army marches into the middle east as prophesied.... We’ll see.. In the meantime let’s enjoy this day that God has given us!
First time I’ve seen the term... thanks for sharing.
ymmv
Literally means “Your mileage may vary” but is often used in forum talk meaning that your results will vary
http://www.urbandictionary.com/define.php?term=ymmv
I really wish what you suggest were true but I have been feeling for quite some time that we have entered a new era in the markets and it will last until capital finds a new safe place to be invested. If you can figure out where it goes soon enough you may profit.
It could not come at a worse time for many of us who are retired or retiring. Unless you were prescient enough to cash in on a lush annuity almost 15 years ago when they were available you have all but ZERO return on investments. You are simply harvesting your nest egg. It is like having lost all your fat and now losing muscle. The “four percent” rule doesn’t work in that case.
Many feel we have entered a deflationary era that will not end until the numbers of people working at good jobs that don’t exist much any more increase. That isn’t going to happen for decades. We are Japan and so is Europe soon to be followed by China when they reap the reward of a low birth rate from one child depopulation. All the developed societies are in old age or entering it. The only fast growing populations are the people with no skills and no money.
It is a long discussion but it is all about demographics and the bottom line is that the developed world gave its jobs to the undeveloped world in search of cheap and the number of consumers is decreasing. This equals deflation. About all you can sell a retiree are services and repair parts. I know we’ll be driving cars for 20 years if we can keep them going and I really don’t see why not. We’ve hit the 10+ year mark and things seem fine for now. We won’t be driving much either and even less as time goes by. When the workers can’t afford the goods they make and the former consumers who lost their jobs to cheap labor can’t buy the goods things spiral down fast until some new system replaces the old one.
This is not a hopeful start to the new year. I do hope you are right though. 20% or so would be glorious but I don’t see it in the cards. The fundamentals are not there though I didn’t see them in ‘12, ‘95 or ‘91 either. We might even buy an new car except we don’t need one.
We are Japan. My banker has been saying this since 2008.
Same here. Deflation is the biggest concern he has.
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