Markets Tank As Global Economy Slows


Wednesday, June 01, 2011
Stock Market Commentary:

Stocks and a host of commodities were smacked on Wednesday after manufacturing data slowed markedly across the globe, Greece’s debt rating was cut even further into junk status, and jobs data disappointed in the U.S. Stocks gave back Tuesday’s gains and fell back into the multi month downtrend which suggests more sluggish action lies ahead. So far, the old adage, “Sell in May and Go Away,” appears to be working brilliantly.  From our vantage point, the market is back in a correction as the major averages are now flirting with their multi-month upward trendlines.

Global Manufacturing Slows, Greek Debt Slashed, & Dismal Jobs Report In the U.S.

Manufacturing growth slowed from all corners of the globe in May which added to concerns that the global recovery may be slowing. China and Europe’s purchasing managers’ index showed the slowest rate of growth in nine and seven months, respectively. U.S. factory growth was anemic, falling to the lowest level in one year while manufacturing growth slowed to a virtual standstill in Russia, Poland, and Hungary. Moody’s rating agency slashed Greece’s credit rating further into junk territory on Wednesday which led many to question the healthy of the euro.

In other news, ADP, the U.S.’s largest private payrolls company said US employers added fewer jobs than expected in May. The report showed payrolls increasing by +38,000 which was the smallest increase since September 2010 and much lower than the Street’s estimate for an increase of +175,000. Some of the factors that are threatening the global recovery are: rising oil prices, aftermath of Japan’s earthquake, Europe’s ongoing debt crisis, and the age of the recovery (growth tends to be strongest in the early stages of a recovery before leveling out as the recovery losses steam).

Market Outlook- Market In A Correction

From our point of view, the market is back in a correction now that all the major averages closed below their respective 50 DMA lines and downward trendlines. Since the beginning of May, we have urged caution as the major averages and a host of commodities began selling off. The next level of resistance is their respective 2011 highs. If you are looking for specific help navigating this market, please contact us for more information.

Stock Market Research?

Global Macro Research?

Want To Follow Trends?

Learn How We Can Help You!




Here are more articles you may like

Claim Your Free Guide Today

Give us your email and we will give you the tools to change your life. 


Learn about Early Entry Points & much more...

© ChartYourTrade | Contact us:

Disclaimer: All communication from ChartYourTrade is general in nature and for educational and general informational purposes only. Under no circumstance should it be considered personalized investment advice. All our work is general in nature and not specific to any one person. All the information on this site and/or that originates from us, or any of our partners or affiliates, is for educational and informational purposes only and is NOT a recommendation to buy or sell anything. To avoid any conflicts of interest, we do not have a working relationship with any of the companies mentioned in our work. Furthermore, we may have a long, short, or no position in any, or all, of the names that appear in our work and they may change at any time without notice. Investing and trading in capital markets or using margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you as well as for you. Before you decide to invest or trade in capital markets you should carefully consider your investment objectives, level of experience, and risk appetite, among other factors. The possibility exists that you could sustain a loss of some, all, or more of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with capital markets, investing/trading, and seek specific investment advice from an independent financial advisor and other professionals. Remember all the information we provide is for educational and general informational purposes only and is subject to change without notice.

Charts and Data are courtesy of MarketSmith Incorporated. Join MarketSmith here.

Terms of Service