S&P 500

Having held on to hope that the reflationary impulse would sustain the adverse series of events and geopolitical shocks over the past two weeks, RBC's head of cross-asset strategy Charlie McElligott is ready to throw in the towel, driven by what we have been pounding the table on for the past three months, namely the fading inflationary impulse out of China, manifesting itself most vividly in the recent crash in various commodities, and iron ore in particular, which has tumbled 30% from recent highs.

Many times over the years, what the stock markets do in Germany and Europe, impacts stocks in the states. Several times Germany has been a leading indicator in bull and bear moves, ahead of what take place in the S&P 500. Below looks that the DAX index over the past decade and the important pattern that could be in play.

European stocks slide as traders returned from a 4-day Easter holidays, Asian equities likewise drop pressured by the ongoing rout in iron ore, while U.S. stock-index futures point to a lower open. British markets were roiled after U.K. Prime Minister Theresa May said she would seek an early election on June 8, in a move aimed at strengthening her hand going into Brexit talks; the FTSE 100 dropped 1.3%, on the news, hitting the lowest since Feb. 24 while 10Y Gilts dropped below 1% for the first time since October.

Authored by Christopher Whalen via The Institutional Risk Analyst blog,

“Anyone taken as an individual is tolerably sensible and reasonable – as a member of a crowd, he at once becomes a blockhead.”

 

Friederich von Schiller, quoted by Bernard Baruch

Authored by John Mauldin via MauldinEconomics.com,

“Companies are doing everything they can to get rid of pension plans, and they will succeed.”

 

– Ben Stein

 

“Lady Madonna, children at your feetWonder how you manage to make ends meetWho finds the money when you pay the rent?Did you think that money was heaven sent?”

 

– “Lady Madonna,” The Beatles