Here's my summary of the key news overnight in 90 seconds at 9 am, including news stocks, commodites and the New Zealand dollar fell as fears grow that Europe's inability to deal with with its debt crisis will slow global growth.
The Dow closed down 0.2% after a late session rally wiped out most of earlier losses of almost 150 points. See more here at Bloomberg.
Few signs are emerging from a two day European summit of any solution to the Euro-zone debt crisis. The 10 year Spanish bond yield jumped to 7% overnight. See more here at Bloomberg.
Fears the European crisis will slow global growth hit commodity prices. Oil prices fell more than 2% with WTI down almost US$2 a barrel to US$78 a barrel. The gold price fell US$22.90/oz to July 2011 2007 levels of around US$1,555/oz.
Banking stocks slumped on both sides of the Atlantic as the implications of Barclays' extraordinary admission of guilt in the LIBOR rate fixing scandal dawned on investors and borrowers alike.
And JP Morgan shares fell sharply after the New York Times reported that losses from its 'Whale' trade in as stocks are likely to blow out from US$2 billion to US$9 billion.
US and European stocks retreated after Spain’s bond yields surged and Germany’s unemployment rate rose more than forecast as a two-day summit of the region’s leaders started in Brussels.
The market is putting fierce pressure on Spain, the world's twelvth largest - and Europe's fifth largest economy. The current EU meeting started poorly. It asked its impotent President to prepare a plan to deal with the crisis.
Meanwhile, economic confidence in the euro area slumped to the lowest in more than 2 ½ years in June and German unemployment increased more than economists forecast, adding to signs the European economy fell into recession. See more at Bloomberg.
Meanwhile, the LIBOR scandal impacts are widening.
Britain's biggest banks face the threat of a criminal investigation over the rate-rigging scandal that has already seen billions wiped off shares and Barclays fined US$450 million. Across the Atlantic, that huge US$2 billion hit that JPMorganChase took from its bad London derivatives trades is ballooning out dangerously. They have moved rapidly to unwind the positions, but in all that haste, internal models at the bank have recently projected losses of as much as US$9 billion may be incurred.
In line with weaker appetites for ris, the NZ$ fell to 78.7 USc from over 79.1 USc yesterday.
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