Double Dip – Recession – Believe it or Not?
What is causing the sell off in all world markets, today the US market is down 250 points so far, WHY?
When the market opened it was 120 points down when The Commerce Department reported that sales of new homes collapsed in May sinking 33 percent to the lowest level on record as potential buyers stopped shopping for a home as government tax credits expired.
Then half an hour after the open Consumer Confidence numbers came out at 52.9, down from the revised 62.7 in May, the market quicly lost another 100 points as the VIX rose 17% instantly.That’s the fear index yes the data sent fear and the sellers took action immediately.
Both components of the index—one that measures how consumers feel now about the economy, the other that assesses their outlook over the next six months—dropped. The Present Situation Index decreased to 25.5 in June from 29.8 in May. The Expectations Index declined to 71.2 from 84.6.
Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence.
Fears of a double dip in the euro zone this will affect the US economy and spark a further correction in stocks and markets around the globe.
The Labor Department is expected to report on Friday that employers eliminated 110,000 jobs in June, and the jobless rate is expected to tick up slightly to 9.8 percent, from 9.7 percent in May we can expect some more downside we may get a relief rally as the US companies head into their reporting earnings season starting with the big bellwether stock Alcoa on the 12th July all eyes will be on them.
