More signs of a slowing economy


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Now that the dust has settled, markets are once again coming under pressure from recession fears and worries about corporate profits. This is what hit shares globally starting overnight from New York, sweeping through the Asian markets and fetching up in Europe.

In Asia hardest hit were exporters and resource stocks, with regional markets plunging more than 5% and in some cases more than 7%; a clear indication that concern has returned.

No longer thinking about inflation, central banks are more interested in creating some balance and promoting growth by getting credit flowing again. In a bold move the Bank of England has slashed its key rate by an unexpected 1.5% to 3% from 4.5%, while the ECB cut its own by a more moderate 0.5%.

Worry, however, is very near the surface and although European markets briefly pared losses after the rate cut announcements and U.S. futures recovered, the reality is that both macroeconomic and microeconomic data are expected to be bad, with weaker chain store sales and weekly jobless claims due today ahead of the jobs report due tomorrow.

With an eye on the President Elect’s early decisions, poor retail sales and a lower sales outlook by Cisco are putting pressure on Wall Street.

Source: ISFM
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