Market conditions have been hostile for a long time. This is acutely evident by recent stock market volatility. Yesterday there was a valuation stalemate. Today was another triple-digit loss (the Dow ended 200+ points down). While it’s the same old story retold, look at these ugly Wall Street Journal headlines:
- Spending Slowed in October (by Eric Morath and Tom Barkley)
- Nokia Siemens to Cut 17,000 Jobs (by Arild Moen)
- German Bond Auction Falls Flat (by Emese Bartha, Art Patnaude, Nick Cawley)
- HSBC China Manufacturing Gauge Falls Sharply (by Tom Orlik)
In a nutshell, consumers continue to fall behind, their spending pattern is slowing and their savings are dwindling. Employment is consistently under pressure, with Nokia adding itself to the long list of large corporations to announce massive job reductions. The largest and most successful economy in Europe (Germany) is having a difficult time raising money. And the world’s largest manufacturer (China) is shrinking.
No mixed signals there.
This is what happens in times like these. When strong entities consistently bail out the weak, soon the strong becomes weak and has difficultly raising money. When global demand shrinks, manufacturing shrinks. And when the consumer shrinks, markets shrink, and the Dow Jones Industrial Average indicates it.
Ugly.
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