Top 3 Reasons Markets Did Not Party on Cinco de Mayo
Markets closed down on Wall Street: DJI -1.1% SP500 -0.9% Nasdaq -0.48% Gold -2.5% Oil -9.3%.
Four trading days, four days in the red. And today’s markets had a particularly strong selloff into the close. On the commodities front, Oil (NYSE:USO) is blowing people’s minds as the once anti-gravitational asset dropped $10.94 in one trading session to close below $100 for the first time since before the Middle East erupted! Gold (NYSE:GLD) also got an ass whooping to drop below $1,500. And Silver (NYSE:SLV) doubled its daily loss of 5% to drop over 10% today! This is what happens when tons of computers produce a domino effect of stop-loss triggers.
Today’s markets were down because:
1) Economic data sucked. This morning the closely watched leading indicator for employment — Weekly Initial Jobless Claims — rose a stunning 10% to push us back to 474,000 claims. That’s horrible news since we need to stay under 400,000 weekly claims to meaningfully reduce unemployment. Tomorrow’s BLS Unemployment release will be more important than usual as investor psychology seems fragile.
2) Commodities crashed. Oil (NYSE:USO) crashed 10%. Silver (NYSE:SLV) crashed 10%. Agriculture (NYSE:RJA) and Agribusiness (NYSE:MOO) also pulled back. The good news: yesterday’s $6 gallon of gas is probably back in the high $5 range. If you remember what it looks like when a ton of newbie traders and hot money flee an asset class, you’re watching it in real-time. Some things never change.
3) Big Detroit made a roar. Although shares of General Motors (NYSE:GM) fell over 3%, the subsidized car maker grew net income over threefold in a year. Now that’s what we call a save by Uncle Sam. If you love staying in the know during earnings season, join us for our coverage here all day long.
Now that you’re in the know, get ready to enjoy some margaritas!