I hope Singapore people start to pull their hair off and jump from everywhere. Marina Financial Center, MBS must have lots of jumps.
https://globalnews.ca/news/1607449/stock-markets-are-diving-heres-why/
Stock markets are diving, here’s why
By Staff Global News
Stock markets, including the Toronto exchange, have sold off broadly in recent days.
AP Photo/Richard Drew
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Disappointing German economic data sparked another day of volatility and selloffs on stock markets Thursday just a day after rallying strongly on indications the U.S. Federal Reserve is in no hurry to hike interest rates.
The S&P/TSX composite index plunged 1.6 per cent or 234.60 points to 14,441.89, pressured by retreating oil prices that fell to the lowest level since December 2012.
The Canadian dollar drifted half a cent lower to 89.57 cents US.
Markets sold off broadly in the United States as well, as New York’s Dow Jones industrial average tumbled 334.97 points to 16,659.25. The tech-heavy Nasdaq dropped 86.98 points to 4,381.62 while the S&P 500 index of big blue chip companies fell 40.68 points to 1,928.38.
Macro worries
Stock markets have absorbed steady losses in recent weeks, deepening turbulence among share prices this fall as investors and experts weigh whether a multi-year run up in stocks is at last due for a correction.
Underpinning concerns is a weakening outlook for economic growth everywhere outside of North America.
Early in the week, the International Monetary Fund said it expects the U.S. and Canadian economies to perform reasonably over the next year, but that won’t likely offset deteriorating conditions in Europe, Asia and elsewhere.
The anxiety has provided a trigger to sell as investors try to pocket profit ahead of a possible broader downturn.
German recession?
The latest data from Europe on Thursday showed German exports in August dropped 5.8 per cent over July as a result of increasing uncertainty over the crisis in Ukraine. It was the largest drop in five years.
The data prompted ING economist Carsten Brzeski to say that “the [German] economy seems to need a small miracle in September to avoid a recession.”
It also came out a day after minutes from the latest U.S. Federal Reserve meeting showed that Fed officials are becoming increasingly concerned about weak overseas growth.
A faltering global economy is one reason that U.S. officials have moved away from linking any interest rate increases to any specific period, meaning rates will rise only when measures of the economy’s health and inflation signal the time is right.
Fall slump
The TSX has had a tough time since hitting 2014 highs in late August, having fallen more than 1,100 points from a year-to-date gain of over 14 per cent on economic concerns and a surging U.S. dollar.
New York markets are also off the best levels of the year and some analysts think seasonality is also a culprit.
“People come back from vacation, see [the market] at all-time highs and say, they’re due for a pullback, let’s pull some money off the table,” said Allan small, senior adviser at HollisWealth.
Small doesn’t think investors are in for a major correction in the 15 per cent range, but thinks markets will stay choppy until after late in October.
At that point, he thinks “you will see strong fundamentals out of the companies that are reporting earnings over the next few weeks And I am hoping that will be enough to calm the markets, regardless of what economic data is coming out of Europe.”
— with files from Canadian Press
© 2014 Shaw Media
