The bears are back in town, with the market entering it’s longest downtrend to the year just a week after having touched all-time highs. The Dow Jones, S&P and Nasdaq were all down again although the selling was not heavy. It seems that equity traders are not completely comfortable taking large positions while they still sense uncertainty from Washington. This comes after the treasury warned the government that it will be flat broke by October 17th. The markets are now awaiting to see whether the government will agree to raise the debt limit in order to avoid bankruptcy.
The word slowdown is being used now, only a week after much ado about tentative signs of recovery. The housing market rose in August, but the rise remains the lowest sales figure for 2013. The price of an average US home dropped to below 255,000 dollars. Despite this analysts are forecasting a slow recovery in housing.
Durable goods orders from the US were shown to have stagnated over August, further confirming the sluggish state of the US economy.
In other news Hertz has recently announced that it will be offering new Tesla electric cars at 2 airports in California, having already added the Tesla roadster to its roster.
The chain of supply and demand is being affected by US economic slowdown, this confirmed by news that Wall Mart has cut orders to deal with reduced consumer demand. The news was then disputed by the consumer giant, but was enough to adversely affect market sentiment. Yesterday Wall Mart stocks were the weakest performer on the Dow, closing more than 1% down.
Finally Amazon ramps up its technological arms race with the release of the Kindle Fire HDX. The tablet will come in 2 different sizes and is geared at taking advantage of movie on demand tie-ins. One of the most talked about features of the new tablets are connection to a live 24 hour help desk.
European stocks closes with mixed performance. FTSE 100 was down, as was the CAC 40, the XETRA DAX PF was up.
Trades of the day: Those of you holding longer term positions shorting (or PUT trades for binary traders) on EUR/USD should not be alarmed by signs of a reversal today. The forecast is still bearish over the next month. You can hedge these positions with intraday long positions of CALL trades on EUR/USD. As far as stocks and indices go, both short positions and PUT trades on American equities may be a good idea, as these have further to drop.