Stocks in the United States and Europe reached a low as the investors began to shift their focus on the debt crisis in Europe and the economic outlook.
The yields on Spanish bonds slowly raised above 6 percent while the German Bund prices saw a rise of 16 ticks. The rising prices of the German Bund is associated with the steep fall that was witnessed throughout the global markets when U.S Federal Reserve announced it would be putting in $40 billion every month to the economy to improve the current situation of the jobs market. It said to continue adding the funds until the situation is improved.
The modest losses suffered were overshadowed by the news of Wall Street closing on Friday with the highest in the last five years.
The Nasdaq Composite Index saw a 0.25% decline with closing at 3,176.13 points, The Dow Jones Industrial average saw 0.16% decline with closing of 13,572.13 points. The Standard $ Poor’s 500 Index saw 0.15% decline with closing of 1,463.50.
The world stocks also fell by 0.21% and the FTSEurofirst 300 Index of the leading European stocks also saw a decline of 0.3% decline, with a closing of 1,116.69 points. This was a pullback for a 14 month long high hit.
Commodities that included copper, oil and gold leveled off following rally of last week.
The U.S stimulus plan may bring boosts to the risk markets, but in order to sustain this recovery, organic growth will be needed. There are however concerns regarding the economy’s ability to generate such an organic growth due to the macroeconomic seeing constant headwinds.
Troin-Lajous, a Louise Capital Markets trader said that upside potential for the stocks is still good as the re-pricing of the ‘non-break-up’ in the entire Euro zone. He said that the re-pricing started a little late because they just realized the downside of the debt crisis in Europe.
| Posted in News and Opinion |
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