Wall Street down. What’s new?
by Peter Switzer
Overnight the UK FTSE was down 1.14 per cent, the French CAC 40 dropped 2.24 per cent while the German DAX lost 2.09 per cent.
Ion-Marc Valahu, a fund manager at Clairinvest in Geneva, got it right when he told Reuters, "EU leaders have waited for so long to implement any changes that the situation is almost out of control and affecting nations across the world”.
We’re being buffeted around by short-term traders who love this kind of instability and uncertainty, and only this weeks Summit can help to give markets some positive direction.
Overnight the Spaniards finally woke up and confronted reality, requesting a formal bailout of its banking sector and this hurt bank stock prices.
Wall Street overnight
On Wall Street, Europe’s capacity to undermine global growth is the new concern and undoubtedly the EU region’s problems are already undermining UIS growth.
The Dow lost 138.12 points or 1.09 per cent to finish at 12,502.66 while the S&P 500 index lost 21.3 points or 1.6 per cent to end at 1313.72.
In a nutshell, we’re in a down zone until the EU summit, and if the leaders come up with the same crap, we will go lower. On the other hand, if they shock us with a genuine, credible plan for dealing with their debt and economic growth challenges, then this stock market malaise could be replaced by optimism and rising stock prices.
This is a big expectation given the EU’s appalling track record.
Lack of leaders
Regular readers know my point of view, and that is the current slide in share prices is a buying opportunity for the long-term investor but the lack of progress out of the EU is staggering and it shows how countries right around the world lack real leaders.
We are being run by a bunch of second-raters like I have never seen before and that includes President Barack Obama — he seems powerless to neither bully or wisely influence the leaders of Europe — and his international ineffectiveness seems on par with his impact at home.
This is disappointing because his pre-election speeches promised so much.
The good news
Anyone who needs to hear some good news, well new home sales hit the best level since April two years ago with experts arguing that this improvement is real and market driven and not encouraged by government incentives as it was in 2010.
That accepted, the EU is in the driver’s seat but the question is — where are they driving us?
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Published on: Tuesday, June 26, 2012
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