Fear Hits Markets, Dow Drops More than 200 Points

Asian markets extended their losses as concern over a slowdown in China weighed on the region. The Hang Seng tumbled 2.2% to 20806, and the Shanghai Composite sank 1.4%, as auto-maker BYD plunged 9.9%. The Nikkei shed .6% to 9638, the Kospi dropped .8% to 2000, and the ASX 200 fell 1.4%, as materials stocks sold off.

European markets plunged, amid escalating fears of a Greek default. The CAC40 tanked 3.6%, the DAX sank 3.4%, and te FTSE lost 1.9% as broad selling gripped the market. Banking shares were particularly hard-hit, as the sector skidded 5.3%, while auto-makers dropped 4.9%.

The selloff continued in the US. The Dow lost 204 points, to 12759, recording its biggest drop in 2012. The S&P 500 fell 1.5%, and the Nasdaq declined 1.4%. Materials and banking shares ld the declines amid concerns over global growth and fallout risk from Greece.

Dow Falls 203 Points, its Largest Drop in 2012

Currencies

Traders dumped foreign currencies for US Dollars as the market shifted to “risk off” mode. The Australian Dollar lost 1.1% to 1.0552, pressured by losses in metals. Amongst European currencies, the Pound fell .9% to 1.5720, the Euro dropped .8% to 1.3114, and the Swiss Franc declined .7% to 1.0886. The Yen benefited from the shift in risk, gaining .8% to 80.86.

Economic Outlook

Wednesday’s reports will include the ADP employment report, the Challenger job-cut report, productivity & labor costs, consumer credit, weekly oil inventories, and weekly mortgage applications.

Stocks Climb as Bondholders Approve Greek Debt Swap

Equities

Markets rallied on Thursday in anticipation of a successful conclusion to Greece’s debt swap. The Nikkei snapped a 3-day losing streak, jumping 2% to 9769, the Kospi advanced .9% to 2001, and the ASX 200 pushed up .7% to 4171. In China, the Shanghai Composite gained 1.1% to 2420, and the Hang Seng climbed 1.3%.

European markets soared, with the DAX and CAC40 surging 2.5%, and the FTSE rising 1.2%. Car-maker, Renault, jumped 6.4% after UBS upgraded the stock to “buy” from “neutral”, lifting the auto sector 3.8%. The ECB and Bank of England both left interest rates unchanged.

US stocks rose as well, but the gains were more modest. The Nasdaq rallied 1.2%, the S&P 500 climbed 1% to 1366, and the Dow tacked on 71 points to 12908. The VIX fell 6% to 17.95, after spiking past 21 on Tuesday.

VIX Falls Back Below 18

AIG shares fell 3.9% to 28.31 after the Treasury said it would sell $6 billion worth of stock. Coach shares jumped 4.6% after the CEO said business is “trending extremely well”.

Currencies

The Euro and Swiss Franc pushed up 1% to 1.3284 and 1.1020 respectively, as the Greece debt exchange was approved by bond holders. The Canadian Dollar and Australian Dollar both climbed .8%, and the Pound rose .6% to 1.5831. The Yen fell .5% to 81.63.

Economic Outlook

Weekly unemployment claims unexpectedly rose by 8000 to 362K, 10K more than expected.

US Jobs Data Beats Forecasts, Lifting Dollar and Stocks

Equities

The Nikkei surged 1.7% to 9930, after rising as high as 10008, as approval of a debt swap by Greece’s private debt holders helped relieve investor anxiety. Exporters led the gains as the yen fell to a 9-month low, with Sony and Mazda each up more than 4%. The Kospi climbed .9%, and the ASX 200 gained 1%. In China, weaker than expected inflation data lifted stocks, with the Shanghai Composite settling up .8%, and the Hang Seng up .9%.

European markets gained moderately, lifted in the afternoon by upbeat US jobs data. The DAX advanced .7%, the FTSE climbed .5%, and the CAC40 rose .3%.

US stocks edged up, but concerns over a Greek “credit event” limited gains. The Dow tacked on 14 points to 12922, the Nasdaq gained .6% to 2988, and the S&P 500 rose .4% to 1371. Small cap stocks outperformed, as the Russell 2000 jumped 1.3% to 817. Greece forced all bond holders to accept the debt haircut, triggering payments on credit default swaps, but the event was largely expected.

The US economy added 227K jobs, 17K more than expected, while the unemployment rate remained steady at 8.3%.

Currencies

The Dollar powered higher against most global currencies. In Europe, the Swiss Franc sank 1.2% to 1.0886, the Euro slumped 1.1% to 1.3122, and the Pound fell 1% to 1.5676. The Yen dropped 1.1% to 82.45, while the Australian Dollar slipped .7% to 1.0575. Bucking the trend, the Canadian Dollar traded flat, settling at .9906.
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Euro Tumbles 1.1% in Afternoon Slide

Economic Outlook

The US trade deficit hit $52.6 billion last month, significantly larger than the $48.9 billion forecast. Wholesale inventories rose a mere .4%, below expectations.

Stocks Trade Mixed

Equities

Asian markets started the week on a down note, despite Friday’s upbeat jobs data from the US., as Chinese trade deficit data pointed to a slowdown in China. The Nikkei slid .4% to 9890, the Kospi skidded .8% to 2003, and the ASX 200 declined .4%. In China, the Shanghai Composite eased .2%, while the Hang Seng rose .2% to 21134, as China Mobile rallied 3.9% due to an upgrade by HSBC.

European markets managed slight gains with the CAC40 and FTSE edging up nearly .1% and the DAX rising .3%. Spain’s IBEX dropped 1.2% as investors dumped Spanish banks on debt concerns.

In the US, stocks closed mixed, while the VIX tumbled 8.6% to 15.64 indicating a sharp drop in investor anxiety. The Dow added 38 points to 12960, the S&P traded flat, and the Nasdaq slipped .2%.

VIX Drops more than 8%

Tranzyme Pharma tumbled 43% after reporting that a recent trial of its GI drug was a failure.

Currencies

The Dollar traded mixed on Monday. The Euro and Swiss Franc both gained .2%, while the Pound fell .2% to 1.5638. The Australian Dollar dropped .6% to 1.0512 as metals fell. The Canadian Dollar declined .2% to .9930, while the Yen rose .2% to 82.30.

Economic Outlook

On Tuesday, retail sales data is due in the morning, and the Fed will issue its rate decision and a statement in the afternoon. The Fed’s recent commitment not to raise rates for 2 years minimizes the impact of the rate decision, but the statement could be significant.

Global Equities Rally on Solid Economic Data

Equities

Asian markets advanced on Tuesday. The Kospi rallied 1.1% to 2025, the ASX climbed 1.2% to 4248, and the Hang Seng tacked on 1% to 21340. China’s Shanghai Composite rose .9%, as rumors of a fuel price hike lifted energy shares. Japan lagged behind, inching up just .1% to 9899, after the Bank of Japan opted to not introduce another round of easing at this point.

In Europe, shares rallied, as upbeat economic data from Germany and the US lifted investor confidence. The CAC40 surged 1.7%, the DAX jumped 1.4%, and the FTSE advanced 1.1%. Banking shares bounced 3.3% as financials led the gains.

The rally continued in the US, where the Dow blasted past the 13000 level, to 13178, up 218 points. The S&P 500 rallied 1.8%, and the Nasdaq soared 1.9% to 3040, its first close above 3000 since 2000. The VIX tumbled 5.4% to 14.80, its lowest level since 2007.


Currencies

The US Dollar settled mixed against global currencies, as investors digested the latest round of global economic data. The Swiss Franc and Yen both fell .7% to 1.0834 and 82.94 respectively, while the Euro dropped .5% to 1.3086. The Pound climbed .5% to 1.5710, the Australian Dollar rose .3% to 1.0550, and the Canadian Dollar gained .4% to .9883.

Economic Outlook

The German ZEW economic sentiment index hit a one-year high, spiking to 22.3 and blowing past analyst estimates of 10.6. In the US, retail sales rose .9% last month, slightly better than forecast, although the TIPP economic optimism index fell to 47.5 from 49.4.