The U.S. market continues to rise and fall on a daily and weekly basis supposedly on the rise and fall of concerns about whether Greece will default on its debt or not.
Meanwhile it ignores the clear signs that the U.S. economy, already close to recession in the first half, continued to slow in the 3rd quarter, which ends in less than two weeks.
Is that because it knows the U.S. Fed can’t control the European debt crisis, so worries about it, but is confident the Fed can and will rescue the U.S. economy and stock market? It did last year, didn’t it. Mmmmmh. But it didn’t manage to prevent the 2000-2002 or 2007-2009 bear markets, did it.
But that was then, and this is now.
So we probably shouldn’t worry that outside of the U.S. most global markets, including 10 of the world’s 12 largest economies, are already in bear markets.
Or that the economic outlook just can’t catch a break from the dismal economic reports.
Yesterday it was that the Housing Market Index, which measures the confidence of home-builders, fell to 14 in September from the already terrible 15 in August. A reading of 14 indicates that only 14% of builders are positive about the housing industry going forward. The index has been between 13 (an all-time record low) and 16 for the last six months.
This morning’s report was that New Home Starts in the U.S. fell 5.0% in August, and previously reported starts in July were revised down. As I said here a few days ago, I thought that at least the reports on housing would be able to show a little bounce off such depressed levels. But not so far anyway. Maybe tomorrow morning’s existing home sales?
Meanwhile, it was reported this morning that in Europe, Germany’s ZEW investor sentiment index, which measures the sentiment of professional investors, plunged further to minus 43.3 in September from an already ugly minus 37.6 in August.
That sentiment is reflected in Germany’s stock market, down 27% even after last week’s big bounce.
To read my weekend newspaper column ‘Will Governments Wait Until Panicked Again Before Acting?’ click here!