What a day Thursday was! There was lots of news, and none of it was good, darn it!
First, the U.S. trade gap with other nations worsened. Despite a surge in exports resulting from our cheapening dollar, the cost of importing (think, oil) surged even more, also because of the cheapening dollar.
The high level trade talks with China ended badly, with us complaining about their continuing human rights violations and them refusing to let their currency appreciate faster. They seem to think the 5% rise over the past year deserves some respect, but we don't. We are on pace for another record trade deficit with China, surpassing last year's stunner of $273 billion.
Meantime, the Greek police were using tear gas on demonstrators opposed to the austerity package imposed upon them by the rest of Europe. Not surprisingly, the Euro dropped in value, which meant the dollar rose, and that has been bad for the market for at least a year now.
A rising dollar also makes commodities cheaper, sending them down. But then, the oil inventories report showed a large unexpected increase, meaning people are curbing their driving, suggesting the economy is weaker than we think. Down went the commodities, including gold and silver.
Did I mention that the verdict for a major insider-trading trial brought down a Wall Street legend today, scaring the gee-willies out of a great many other traders? Some may be selling their investments and leaving the country . . .
I'm surprised the Dow was only down 130 points! While I'm bearish on the market in the short-term, the flow of news today was anything but "fair and balanced." It was all bad!
