Wow! What a morning. First, General Electric's (GE) earnings came out before the bell and they MISSED earnings. Man, I don't know of the last time that I heard of GE missing earnings and by so much. The stock dropped almost 5 dollars a share.
Then Goldman Sachs did the "unheard of"....they gave a sell short recommendation to the public. Now in all of my years I've never heard of that one. They recommended selling short Washington Mutual (WM). Wow!
Rarely can you ever get a firm to say "sell" to an existing buy position (long). However, they went a further step and said "short it".
So these two things really sent the stock market plummeting upon the opening.
This "fall" in stocks killed the carry trades too, especially GBP/JPY. It just gave it more reason to continue its downtrend. Check out the daily chart below. Click on it to enlarge it.
The Carry Trades get killed as U.S. stocks sell off!
Remember that we've got the G-7 (Group of 7 largest industrialized countries) meeting today and tomorrow. So they could talk about the dollar or the yuan, etc.
So see what they have to say. Also note the horrible consumer confidence number that came out today. It just keeps getting worse and worse. These readings are now at recessionary levels for sure. The University of Michigan's Consumer Confidence reading came in at 63.2 vs. 69 expected and 69.5 from the previous month.
This "confidence trend" just continues to trend downward very steadily. That's horrible!
Stay tuned...
Sean Hyman
Currency Director
The Sovereign Society
Comments