Data and Drivers Aplenty For Continued Market Swings

FRIDAY MARKET UPDATE: This was a week of excessive political and economic news and moves, and there's little respite on the horizon for stock markets

Michael van Dulken 9 November, 2012 | 5:56PM
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This article is part of Morningstar's 'Perspectives' series, featuring contributions from third parties including asset managers, academics and investment industry thought leaders.

The Democrats may have been able to celebrate President Obama keeping the Oval office but the markets haven't. A significant sell-off has materialised since the re-election on the realisation that the world is pretty much the same place it was with the looming US fiscal cliff ($600 billion reversal of tax cuts and government spending, akin to imposing austerity) remaining the biggest risk to US growth and its possible highway back to recession. Imagine the knock-on effects elsewhere in the world, both sentiment and trade-wise. 

Add to this a gloomier outlook from the European Central Bank's (ECB) President Draghi on eurozone growth and a raft of depressing industrial, manufacturing and services data from the region (Ouch! That pretty much covers everything, doesn’t it?), and the prospect of Greece and Spain making us wait even longer for them to receive bailout money and make a bailout request respectively, and we have the ingredients for the correction in which we find ourselves. We've been highlighting this possibility for several weeks...you say "broken record", I say "consistent message". 

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About Author

Michael van Dulken  is head of research at Accendo Markets, an online trading services provider offering CFDs, spread betting and forex to retail (private) clients.

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