Confirming and continuing yesterday’s newly formed intermarket correlations, gold and the dollar are both up this morning, while an overnight stock futures rally fizzled this morning, pointing to another down day for stocks. The much-anticipated 3 a.m. futures rally never materialized.
The odd cross-current here is that the Asian stock markets fell less than a percent last night, while the European bourses are either flat or green. Normally, if the US markets go down by -2.5% (as they did yesterday), you can expect Tokyo to follow along by sending the NIKKEI down even more, and for Europe to swoon in sympathy. This didn’t happen.
In the media, this provided some welcome fodder for calming news stories:
Risk aversion eases following sell-off
Last updated: August 12 2010 12:07
Thursday 12.05 BST. Selling is on pause after a collapse in the price of shares and a surge in bond yields on Wednesday, following a downgrade of US and global growth forecasts from central banks.
The rise of the Japanese yen has cooled and benchmark government bonds in the US are being sold off, suggesting a levelling of the deflationary fears that spiked on Wednesday.
I know the intent here is to be calming, but does anybody else think that this daily cycling between “deflationary fears” and risky behavior is unhealthy? These sorts of swings used to take weeks, if not months. Now they are happening overnight. What’s next, twice daily?
It turns out that the article may have been a bit premature, as US stock futures followed along for a while, but then
by isjrb029 
