Global Markets Tanking, US Stocks Down Again as Emerging Market Crisis Deepens

Little changed over the weekend to affect stocks, though the major issues remained. If you missed out Saturday Special Edition, it gives a good overview of what's occurring in world markets and what to expect.

Monday's action started on ominous beginnings as the Nikkei tumbled, along with all other Asian indices, most of them sporting losses of between one and two percent. When the world turned to European bourses, selling was the primary move, though losses in Europe were less severe than in Asia.

US indices opened higher, but quickly gave up their paltry gains. The NASDAQ was hardest hit, going negative and staying below the flat line for almost the entire session. The Dow - which closed lower for a fifth straight day - and S&P were up in the morning, down by midday, back up in the afternoon, but late-day selling finished them lower.

Word out of Turkey that the central bank is about to ratchet up interest rates offered some encouragement, and in Argentina, capital controls were announced, to the effect that citizens can buy up to $2,000 of US Dollars per month if their monthly salary is over 7,200 pesos ($900), after a two-year ban on buying dollars. Large businesses and investors were still barred from purchasing US Dollars as a hedge against Argentina's spiraling inflation.

The reaction to Friday's steep decline was more selling of US stocks, with declining issues beating advancers by more than a 3:1 ratio and new 52-week lows surpassing new highs for a second straight session.

The raging currency crisis did not prevent the powers that be from standing on precious metals, which were pounded down after gains in the Far East and again smoked at the NYMEX close and into the thinly-traded Globex session. At 4:00 pm ET, gold was down nearly $10 from its NYMEX high, with silver down more than 15 cents from its high mark.

After the close, tech monster Apple (AAPL) announced earnings that narrowly beat estimates, but, lagging iphone sales and a downbeat guidance for the current quarter sent shares down in after-hours trading by more than five percent.

If the Apple earnings are viewed negatively, it will only add fuel to the fire sale in stocks going forward. More companies are reporting this week, though much of investor focus is on the Fed meeting Tuesday and Wednesday. If the Fed maintains their stance of purchasing $75 billion in bonds per month - which is likely - that could provide some relief, though there seems to be a generally-mistaken idea that the Fed plans on cutting an additional $10 billion from their bond purchasing program each month. Such a move would, under current conditions, only exacerbate the flight of capital from equity markets and possibly plnge the global economy into a wide-ranging recession, which, on its own, may not be avoidable.

DOW 15,837.88, -41.23 (-0.26%)
NASDAQ 4,083.61, -44.56 (-1.08%)
S&P 1,781.56, -8.73 (-0.49%)
10-Yr Note 100.21, +0.13 (+0.13%) Yield: 2.76%
NASDAQ Volume 2.21 Bil
NYSE Volume 3.98 Bil
Combined NYSE & NASDAQ Advance - Decline: 1410-4350
Combined NYSE & NASDAQ New highs - New lows: 63-119
WTI crude oil: 95.72, -0.92
Gold: 1,263.40, -0.90
Silver: 19.79, +0.028
Corn: 431.75, +2.25