Has the market's "melt-up" levitation finally ended? Of course, it could be much worse: as Bloomberg's Paul Jarvis recalls, thirty years ago on this day traders around the globe were staring at their screens in disbelief as stock markets turned to a sea of red: the Dow, S&P 500, FTSE, DAX and CAC fell -23%, -20%, -10%, -9% and -10% respectively.
Global markets traded near all-time highs on Tuesday, with S&P futures, Asian shares and European stocks all flat this morning, while oil continued to gain on Kurdish geopolitical concerns while most industrial metals fell. The euro extended its recent slide and stocks drifted as Spain’s escalating hard-line response to the Catalonian secession threat fueled concern the crisis may intensify.
World stocks and commodities rose on Monday, boosted by upbeat Chinese data, while U.S. oil futures jumped to a near six-month high as escalating tensions between the Iraqi government and Kurdish forces threatened supply. Global markets digested the large amount of weekend newsflow, and clearly liked what they saw as S&P futures were modestly in the green, as both European and Asian stocks are higher.
California’s burgeoning secessionist movement has been watching Catalonia’s struggle for independence with an eye toward the future. Proponents of transforming California into an independent republic have pointed out that there are many similarities between Catalonia and America’s largest state. For example, both are relatively wealthy.
However, the circumstances of the two states diverge in one notable respect: The US constitution and California’s state constitution would make it easier for California to secede than Catalonia.
Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.