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Monday, July 25, 2016
Markets head lower as oil & gold prices decline
Dow dropped 93, decliners over advancers almost 2-1 & NAZ gave up 10. The MLP index lost 2+ to the 321s & the REIT index was about even in the 375s. Junk bond funds were little changed & Treasuries crawled higher. Oil fell to the 43s & gold was also lower.
Germany was put on edge after an unprecedented series of 4 attacks
in the last week left many dead & wounded, placing pressure on Angela Merkel's gov to stem the violence. The
latest incident occurred late Sun at a music festival near Nuremberg, when a man identified as a
Syrian refugee blew himself up near the entrance to the event, injuring
12 others. The bombing followed a shooting spree at a shopping
center in Mun on Fri, in which a man shot dead 9 before killing himself. The attacker, identified as an
Iranian-German who was born & raised in Germany, had no apparent
connection with a terror organization. In another assault
on Sun, a machete-wielding 21-year-old male, also identified as
Syrian refugee, killed a pregnant woman near Stuttgart .
Last Mon, an ax assault by an Afghan asylum seeker allegedly inspired
by Islamic State wounded 2 train passengers near Wuerzburg.
The Group of 20 meeting in China added to the chorus of voices
calling for more fiscal measures to boost growth, which could have
important implications for asset prices if carried out successfully. G-20
finance ministers said monetary policy alone cannot lead to balanced
growth & “fiscal strategies are equally important to support our
common growth objectives,” yesterday. Japan is said
to be discussing a ¥3T spending increase for 2016. Finance
ministry officials briefed Prime Minister Shinzo Abe that stimulus can
be increased to ¥20-30T. UK Chancellor Philip Hammond says the gov could reset fiscal policy if deemed necessary in the Autumn Statement. ECB pres Mario Draghi said that to reap full benefits from monetary
policy, other policy areas must contribute much more decisively, both at
a national and European level. A survey shows a record net 44% of investors think
global fiscal policy is too restrictive.
China stocks closed marginally higher in sluggish trading today
as a lack of fresh market cues kept many investors on the sidelines. The CSI300 index edged up 0.2% at 3230, while
the Shanghai Composite Index inched up 0.1% at 3015. Total volume of A shares traded in Shanghai was 14.4B shares, while Shenzhen volume was 19.3B shares. Top listed property developer China Vanke was one of the most actively traded stocks, bouncing 1.8% to 17.7 yuan ($2.70). The Shenzhen-listed stock has still plummeted more than 20% since early Jul, battered by internal shareholding struggles,
with the company & its biggest shareholder being investigated by
China's securities regulator for rule violations.
In an uninspiring day, stocks are drifting lower. The stock market is vastly overbought, so any pullback is not a surprise. The out of control world is not helping matters. There was a shooting in FL overnight, it's difficult to keep track of all the violence around the globe as stock averages remain very close to record high levels. Earnings are coming in mixed as expected.
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