Capitulation? Market waits for 3 pm witching hour
1 hour ago
The market had already been wavering on worries about Europe, where German bund yields fell to record lows. Greece was a source of concern, as its market plunged on concerns Athens will seek to exit the government bailout and try to go it alone.
"I think immediately you have to cut back (U.S. GDP growth expectations) a half percentage point to 2.5 based on retail sales," Rupkey said. "The consumer looks pretty dead in the water here. If it does reach 3.0 it's going to be due to the fact that goods are stacking up on store shelves due to an inventory overhang."
As traders sought safety in bonds, they were also placing bets that the Federal Reserve would not hike interest rates until later next year because of a softer economy.
"The bottom line is the omnipotence of central banks is losing its luster," Boockvar said. "The yield of the December 2015 fed funds futures contract is now down to 37 basis points and it was 75 basis points just a few weeks ago. It's down 12 basis points just today. They're still looking at at rate hikes next year, but now you're talking about the latter part of next year. Now we're looking at one to two rate hikes next year instead of the three the market was pricing in and the four the Fed forecast."
Randy Frederick, managing director, trading and derivatives at Charles Schwab, said Europe and headlines about Ebola are hurting stocks, in addition to disappointing U.S. data. But he also says the worst of the selling may be over, after the S&P 500 plunged to 1837 Wednesday morning, an 8.7 percent decline from its September highs. He too noted the last hour of trading will be the key.
http://finance.yahoo.com/news/weak-us-d ... 6.html?l=1