The trigger to set off a Global Recession is Europe! Do we see this happening now?
Italy’s largest Bank UniCredit lost 40% of their share price in the last 4 days and that’s after a 10 for one reverse stock split a strategy used to help prop up the share price but I guess it failed. They have 40 million customers globally in 22 countries.
Check out the chart
We are all exposed with the outcome in Europe if their banks stand or fall the effects will be felt globally on different impacts.
Europe’s troubles continue they are slipping into recession the austerity measures are proving to be challenging Bond yields are rising.
The bond buyers are demanding a higher yield due to the risk perceived yes the Fear of default. This in turn pushes the countries debt up higher something they are struggling paying now an impossible situation or solution.Standard & Poor’s on Friday cut its ratings on nine European countries, including France, Spain and Italy the start of more to come.
We have already seen the fall in the Euro, check out the chart below:
What’s going on with the US
JP Morgan reported quarterly earnings on Friday that met Wall Street expectations in profit but missed on revenue the Banks are an important sector to watch if confidence is lost in the banks this could lead to credit issues.
The US banks are also holding $4 million foreclosure’s off their balance sheets remember they are hoping to put them on the market one day with the housing market lower than it was in 2009 it would seem an inappropriate time to do that as it will further depress the housing market and they could take a lot less than they are anticipating.
Stimulus has driven the US stock market rally since 2009, now without more stimulus where is the stock market headed?
Combined with the Europe woes any trigger could set off a selling frenzy at any moment on global markets the smart money are distributing so the market top looks close. It’s Bear Wrangler time…
