Volatility, Correction, Jobs, Economy, Europe, Elections, Fiscal Cliff.
All words that make you a little nervous reading the headlines or opening those statements. Plenty of it this week. Today’s “market value adjustment” officially signaled a 10% correction is here, and the major indexes have given up all gains for the year.
What looked like a near, short term bottom was taken out by the
bad, horrid, less than good employment numbers. In May, the U.S. economy generated only 69,000 jobs, worse than the lowest estimate among 87 economists surveyed by Bloomberg. The poor employment data seems to be caused by a few factors, such as foreign weakness. “Europe seems to be heading for an unavoidable train wreck, and now China’s economy is slowing down. Both are bad news for U.S. exporters. Plus, there’s a chance that the European crisis could also trigger a global financial crisis worse than the one in 2008-09 that led to the first worldwide recession of the post-World War II era. “It’s pretty clear that this is a reaction to what’s going on in the rest of the world,” says Paul Ashworth, the chief U.S. economist at Capital Economics.”