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Tuesday, March 22, 2016
Lower markets after attacks in Brussels
Dow fell 28, decliners slightly ahead of advancers & NAZ gained 6. The MLP index lost a fraction to the 268s & the REIT index crawled up a fraction in the 332s. Junk bond funds were a little higher & there was strong demand for Treasuries. Oil was lower & gold climbed over 1250.
Belgium was on the highest terror-alert level after 3 bombings in
Brussels killed at least 26, injured more than 100 &
raised fears of a string of follow-up attacks. Prime Minister
Charles Michel, calling it “a violent and cowardly” assault, deployed
Belgium's military to secure the capital after 2 explosions at the
airport & a bombing at a subway station a short walk from EU headquarters.
Women injured in the Brussels airport explosion on March 22.
Photographer: Ketevan Karda/Georgian Public Broadcaster via AP Photos
“We
are trying to stabilize the situation to assure security on other sites
for which there is still concern,” Michel told reporters. “This is a
dark moment for our nation. We need calm and solidarity.” The transport network was shut down as Belgian police combed the
airport & public sites for booby-trapped packages. Some schools, train
stations & shopping centers were evacuated & emergency services
struggled to cope with what appeared to be a coordinated attack along
the lines of the Nov mass murders of 130 at multiple locations in
Paris. One of the
airport attacks was a suicide bombing. No
one claimed responsibility. The attacks occurred 4 days after
Belgian police captured Salah Abdeslam, believed to be the only
surviving perpetrator of the Paris massacres. The 4-month manhunt had
been accompanied by criticism that Belgium was too late to recognize
the jihadist threat in some poorer Brussels neighborhoods. The underground attack wreaked carnage down the street from where EU
leaders held their latest summit on Fri
German manufacturing grew at the slowest pace in 16 months in Mar,
evidence that the economy is feeling the pressure of cooling global
demand. The Markit Economics Purchasing Managers Index slipped to 50.4
from 50.5 in Feb, just above the 50 level that separates expansion
from contraction. While a separate report showed services improved this
month, a gauge of new business across both sectors declined to the
lowest in 8 months. The Bundesbank said yesterday that Europe's largest economy will
probably maintain its “solid rate of expansion” this qtr, but there
may be a slowdown in the next 3 months. It highlighted weak factory
orders & a deterioration in business expectations. Markit said its services gauge for Germany rose to 55.5
from 55.3 & composite measure of both sectors was unchanged at 54.1. In France, the composite activity measure rose to 51.1 in Mar from
49.3 in Feb, lifted by services.
US home prices rose in Jan as shoppers competed for a limited inventory of listings. Prices
increased 0.5% on a seasonally adjusted basis from Dec, the
Federal Housing Finance Agency said. The gain matched the estimate. Prices climbed 6% from a
year earlier. The low number of homes on the market is holding
back home sales & driving up prices. Prices increased from a year earlier in all
regions, led by the South Atlantic with an 8.9% gain. The FHFA index measures
transactions for single-family properties financed with mortgages owned
or securitized by Fannie Mae & Freddie Mac. It doesn't provide
specific prices. The median price of an existing single-family home in
the US was $215K in Jan, up 8.3% from a year earlier.
Stocks did not sell off in a major way after the attacks in Brussels. But this is a vivid reminder of the dangerous world we live in. The terror alert around the world has been raised, a strong negative for the business around the globe.
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