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The Breakfast Briefing: Global Stocks Extend Declines Amid U.S. Budget Standoff
FYI: The pain across equity markets continued on Friday, with European and Asian stocks retreating in the wake of more losses on Wall Street and U.S. futures showing few signs of a rebound. Major currencies were calmer as bonds in Europe retreated.
The Stoxx Europe 600 Index edged down at the open, with telecommunications shares leading declines as almost every sector fell. The MSCI Asia Pacific Index headed for its fourth drop in six sessions as benchmarks slipped in Japan, China and Australia, though shares in Hong Kong rose. Futures for the S&P 500 fluctuated in a narrow range. West Texas crude was up on the day, but remained down almost 10 percent this week. Treasuries were steady but most European bonds fell ahead of the Christmas break. The dollar was stable against a basket of peers though weakened versus the pound and euro. Regards, Ted
What You Should Do Now Investors should not be looking to buy and should consider being entirely in cash, if they aren't already. But they should be building and updating their watch lists with names like Atlassian stock. Wait for the stock market to rally over several days, confirming that new uptrend with a follow-through day. Even then, be cautious. The whipsaw stock market correction has already seen two confirmed rallies fail almost immediately.
If you find it boring to be in cash in a bear market, resist the temptation to get back in. If you find it hard to resist, go outside your house at midnight in summer wear — T-shirt, shorts and sandals. There's a time and place for summer clothes, and a time and place to be bullish.
Just some wondering thoughts, for me, it's awful tempting to buy a little when you see some great companies getting close to a 40% discount from their highs. I think we are already in recession or very close to that tipping point, but at some point companies like Apple, Amazon and Alibaba will be breaking new highs again. 2019, 2020, 2021, who knows.
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