The Major Financial Markets Are In Panic Mode

The Major Financial Markets Are In Panic Mode

$DIA, $SPY, $QQQ, $VXX, $CS, $VLKAY, $GLCNF

The recent global stock-market volatility is easy to categorize: it’s a full-blown “panic,” Credit Suisse says.

The recent “doomsday signals” hare recent and plentiful: “China’s stock market rout, commodities getting crushed, and a loss of investor confidence at Glencore (OTCMKT:GLCNF) and Volkswagen (OTCMKT:VLKAY) have combined for the worst Quarter since Y 2011,” the report said.

Global risk appetite dropped to “panic” levels for the 1st time since January 2012, according to Credit Suisse’s Global Risk Appetite Index.

A team of Credit Suisse analysts, studied global growth rates, economic policies, and asset valuation to deliver the “panic” diagnosis.

“Global growth is not a strong supportive factor for risky assets right now,” said the analyst team said.

“Weak Chinese growth has had very negative effects on general emerging market performance and commodity prices. And a strong dollar has caused many exporters around the world to see declining trade revenues, even if actual activity has not fallen off a cliff,” they added.

The Credit Suisse (NYSE:CS) analysts said panic usually is an overreaction to short-term events, providing a chance to buy risky assets at a cheaper price.

“If panic persists, it could alter the global growth outlook for the worse. Ongoing panic and weak global growth will likely influence Fed behavior. But history suggests rebounds often occur when they are least expected,” the Credit Suisse report said.

“That’s why we see the current panic as a tactical opportunity, even if it does not point to a lasting boom in risky assets.”

Credit Suisse’s warning is just another in a long line from prominent financial voices recently.

The US stock market ended the week on an upbeat note despite a deep dive at the open. The S&P 500 turned a 30-pt loss into a 27.5-pt gainer to end higher by 1.4%, the NAS 100 (+1.7%) outperformed as new money entered the market a Key pivot marks.

Volume: trade was above average with more than 1-B/shares changed hands on the NYSE.

On the day: DJIA +200.36 at 16472.37, NAS 100 +80.69 at 4707.77, S&P 500 +27.54 at 1951.35

On the week, the S&P 500 + 1.0%,  and the NAS 100 + 0.5%.

• NAS 100 -0.6% YTD
• S&P 500 -5.2% YTD
• DJIA -7.6% YTD
• Russell 2000 -7.5% YTD

Have a terrific weekend.

HeffX-LTN

Paul Ebeling

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