Lower Start for Markets as Euro Fears Surge
Despite rising consumer confidence, yesterday saw the CNN Fear & Greed index dive from 91 to 76 as doubts increased over whether quantitative easing will be enough to reignite global growth. Today at 7 a.m. EDT, the Mortgage Bankers Association weekly mortgage applications survey was released, showing that mortgage application activity rose 2.8% last week as interest rates declined further.
August's new-home sales figures are due to be released at 10 a.m. EDT. These are expected to have risen by 380,000 after gaining 372,000 in July. The EIA weekly petroleum status report is due at 10:30 a.m. EDT.
In company news, Barnes & Noble is due to unveil its latest book reader today, said to be lighter and thinner than Amazon's latest Kindle readers. Jabil Circuit unveiled disappointing quarterly results after markets closed last night and forecast ongoing weakness as it deals with falling demand. Companies due to report results today include Progress Software and Worthington Industries.
European markets fell sharply this morning as concerns grew over the lack of progress being made in resolving the eurozone crisis. The yield on 10-year Spanish government bonds reached 6% once more, ahead of Spanish Prime Minister Mariano Rajoy's unveiling of a new round of cuts and structural reforms tomorrow. The cuts will be aimed at preempting bailout conditions, but Rajoy is coming under increasing pressure to request a bailout sooner, rather than later.
In Greece, a general strike against government cuts has brought the country to a halt as pressure mounts from the IMF for a further restructuring of its government debt -- a subject that is likely to arise when German Chancellor Angela Merkel meets IMF's managing director, Christine Lagarde, later today.
Finally, a statement issued yesterday by the German, Dutch, and Finnish finance ministers has raised concerns over eurozone bank recapitalization -- a key requirement. These three governments are now stalling on the creation of a European banking supervisor. Until this takes place, the European Stability Mechanism (a bailout fund) cannot be used to recapitalize the region's troubled banks.
At 7 a.m. EDT, the DAX was down 1.6%, the CACwas down 2%, the FTSE MIB was down 2.6%, and the IBEX was down 3.1%. In London, the FTSE 100 (INDEX: ^FTSE) was down by 1.2%. Just five companies registered gains this morning, led by ultra-defensive favorite British American Tobacco, which rose by 0.3%. Among the biggest fallers were Barclays, Royal Bank of Scotland, and Lloyds Banking Group, which were all more than 3% lower, as were most of the second-tier mining shares.
Billionaire investor Warren Buffett rarely invests outside the U.S., but he did invest $1 billion in a well-known British blue chip brand, expanding his stake in the company to more than 5%. This famous British name has global expansion potential -- and you can discover the identity of the company and the price he paid in this special exclusive report. Best of all, the report is free, so download it today while it's still available.
Are you looking to profit from this uncertain economy? "10 Steps To Making A Million In The Market" is The Motley Fool's latest report. We urge you to read it today -- your wealth could be transformed. Click here now to request your free, no-obligation copy. The Motley Fool is helping Britain invest. Better.
Further investment opportunities:
The article Lower Start for Markets as Euro Fears Surge originally appeared on Fool.com.Roland Head has no shares in any of the companies mentioned in this article. The Motley Fool owns shares of Amazon.com. Motley Fool newsletter services have recommended buying shares of Amazon.com. Motley Fool newsletter services have recommended writing puts on Barnes & Noble. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.