What’s Bugging the Market

by Laura Ehrenberg-Chesler on March 10, 2011

in Economic Indicators,Employment,Geopolitical,politics

One week ago I blogged about the action of the market, and its implication for equities heading lower in the coming weeks.

Today, the market is down over 200 points as of 2:00pm CST.   The equity market is being roiled by several factors.  First China, which has been a remarkable growth engine, appears to be successfully slowing its growth rate.  That is good for China’s rate of inflation, but not as good for companies trying to sell their goods into China’s domestic economy. 

Next, the Saudi day of Rage, which was supposed to be a non-starter, may turn into something more ominous.  There has been word that the military has fired on protesters.  This new turn of events has caused oil to firm above the $102 per barrel level.

In addition, Jeffrey Gundlach, the person now considered to be the “bond  king”, spoke on CNBC this morning.  One comment he made caught my ear.  He said that as many as 1 million public workers could be laid off, as states and municipalities cut their budgets.  While that may be a long term positive, it will certainly drive the unemployment rate up, and it has the potential, along with sustained higher gasoline prices, to tip us back into a recession. 

I think these issues, along with the others I mentioned a week ago, are what is bugging this equity market.

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