Friends
Stocks sold off a bit today on a report from mining company BHP Billiton that iron ore sales into China have been slowing. Although not new news, traders took it as another cue that slowing growth in China may not be good for the global economy and by extension economically sensitive stocks. The result was a drop of 69 points in the Dow Jones Industrial Average and a close at 13,170. The S&P 500 was down 4 points to close at 1405. Gold was down $18 to trade near $1648 per ounce and oil was down $2.48 to close near $105.61 per barrel.
As mentioned, stocks sensitive to economic growth were off the most, while defensive names (ones that are not as sensitive to the economy) showed the most resilience. After their recent declines, bonds rallied just a bit as any indication of economic slowdown would once again benefit bonds. The recent belief that the economy is improving has been detrimental to bonds for the past few weeks.
In the meantime we’ll keep monitoring the economic data as we will get existing home sales and leading economic indicators later this week. We’ll keep you informed.
Have a nice evening everyone.
