Bad news Monday on a Tuesday is really a continuation of Friday.
To help lift you out of the Memorial Day weekend fog of beer, brauts and brownies, Fitch downgraded Spain from AAA to AA+ and this announced rekindled fears of more-bad-things-happening-quickly for Europe.
In quick succession from Monday to Tuesday, we’ve had the following:
- Negative BusinessWeek article on Italian muni losses.
- ECB Financial Stability Report detailing potential losses of E195 billion for European banks.
- ECB comments stating they are sterilizing all of their bond purchases.
- ECB comments stating there is no Plan B for Greece.
- ECB stating they are happy with the level of the Euro.
- ECB stating that they can solve a liquidity crisis, but not a solvency crisis.
- Rumors of an Italian and Spanish debt downgrade.
- France saying it’s a stretch for them to maintain their AAA rating.
- China PMI slipped more than expected.
- BP can’t cap its oil gusher in the gulf.
Extra credit: it’s the start of the hurricane season! The good news of virile Canadian growth, stronger than expected UK PMI and German PMI are ignored.
The global PMIs are showing a more mixed result as we move through today, but initially they were all worse than expected. The developing theme is that China and others are experiencing slower growth due to the slowdown in Europe. With that theme, there are articles circulating about the drop in commodity prices signaling a global slowdown.