Just before the aborted Santa Rally took off in earnest, on December 23 the famous US economic growth prognosticators at the Atlanta Fed (famous because unlike Wall Street they actually are right) slashed its Q4 GDP forecast from 1.9% to 1.3% citing weakness in real consumer spending and poor existing-home sales.
Led by a 4.3% collapse in Germany's DAX index, European Stocks plunged 2.5% today which is the worst start to a year ever. European credit markets spiked higher in risk. 10Y bund yields tumbled over 6bps and peripheral sovereign risk spreads jumped 10-15bps. Not a good start for Draghi and his pals...
Germany led the collapse...
Which has driven Stoxx 600 - the broadest European stock index - down over 2.5% for its worst start to a year ever!!
Charts: Bloomberg
Despite a bloodbath in US equities, gun stocks are soaring this morning (Smith & Wesson up 7% and Sturm, Ruger up 3%) as ABC News reports, as we detailed yesterday:
With the Oregon standoff continuing, it appears "the world's greatest gun sales-man" has done it again.
From an escalating crisis in Saudi/Iranian relations to crashing markets in China, the prospects for peace and prosperity in the new year seem dim.
With the world once again gripped by the latest Middle East snafu in which suddenly every Gulf State has found itself in the worst diplomatic crisis with Iran in 30 years which, incidentally, started after Saudi Arabia executed a Shiite cleric in its biggest mass execution yet, unleashing righteous Iranian anger at its action, many have forgotten - if only temporarily - about Europe's biggest crisis at the moment: the onslaught by over one million refugees, who are desperate to escape from the political disaster that are the broken states of Syria and Iraq.