The absence of fundamentals in the world’s leading economy persist for the second day, allowing investors’ feelings to control the market and direct it in the way they believe that is the most profitable for them; meanwhile, overall pessimism dominated, leading the DJIA to trade and close below 10.000 levels for the first time since November 2009 as commodities rallied.
U.S stocks sank throughout yesterday’s trading session; where the DJIA lost more than 100 points and closed at 9908.39 levels; while the S&P 500 declined by 0.89% to close at 1056.74; the NASDAQ Composite shed 15.07 points to close at 2126.05. On the other hand, futures pointed out before the opening of today’s trading session to a higher opening level.
Investors fear that the economical outlook in the U.S, alongside the huge deficit global government faces, after providing a large stimulus plans to help fund programs and support economical growth, left its footprint in trading; markets witnessed volatility due to investors focusing upon high yielding assets and commodities as a safe haven in the current situation, while turning away from low yielding assets, such as the Dollar and the Yen.
Stocks tumbled over the previous weeks on concerns that sovereign counties will fail to fund its large deficit; where Spain, Greece and Portugal are facing huge deficits. In addition, investors feel that the deficit will spread to larger countries and upend the global recovery.
Today’s only news from the U.S. will be the Wholesales Inventories, where the median estimate of markets is expected to rise in the month of December by 0.5 percent; compared with the previous reported estimate of 1.5 percent, given the fact that inventories’ still hammers down economical activities in the U.S. as manufacturers lower their inventory levels to cope with the current weak demand.
The U.S economy still faces a lot of challenges, where high unemployment alongside tight credit conditions continue to hammer down economical activities and narrow spending, which accounts for two thirds of growth in the United States; thus with the current economical conjuncture and fears from deficits around the world, global economies will need more time to recover from and shake off the effects of the worst financial crisis in decades, once and for all.
The Dollar continued to lose ground against major currencies around the world; where the U.S Dollar index, gauge for the performance of the Dollar against six major currencies, was unchanged so far in today’s trading session as it is trading at opening levels at 80.232, reaching the highest levels so far at 80.252 and the lowest at 80.236.
Investors’ emotions will continue to dominate trading this week, as the lack of fundamentals persist in the U.S and major economical forces around the world; therefore volatility is highly projected over this week.
