Stocks have opened notably weaker on several factors:
1) Concerns are mounting that the Federal Reserve may hike interest rates in June.
3) Another stunning drop in European bonds. German 10-year bond yields are down another 21 percent, now yielding 21 basis points (it was 35 basis points at the close Friday). French yields are also down 9 percent at 54 basis points.
The strength in the dollar is causing real problems in emerging markets: the Emerging Market ETF has been down eight straight days.
4) The dollar strength is also causing some problems with earnings. We all know that weak earnings are weighing on the energy sector, but the weak dollar is causing other sectors to come down as well.
S&P 500 earnings estimates (source: S&P Capital IQ):
- Q1: down 2.6%
- Q2: down 1.8%
- 2015: up 1.1%
If these numbers stay on course, the first quarter will be the first down quarter since the third quarter of 2009.