What’s spooked the markets – MoneyWeek

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WhiletheGreekpresidentandhisgovernmentwerereassuringtheEUthattheycouldslashtheirdeficitbyunprecedentedlevels,thepopulationwasbeggingtodiffer。

Customsofficialsandtaxcollectorswentonstrike(althoughgivenGreecesendemictaxdodging,maybenoonewillnotice)。

Theeuroalsotankedagainstmostmajorcurrencies,whichisniceforanyonewhowasshortingit。

ButyoucouldalsopointtothefactthatUSjoblessclaimsunexpectedlyrose。

ThenumberofUSworkersclaimingout-of-workbenefitsjumpedby8,000to480,000。

Economistshadbeenexpectingadecline。

IanShepherdsonofHighFrequencyEconomicsworriedintheFinancialTimes:Itisstartingtolookasthoughthedownwardtrendinclaims,whichhasbeenkeytothestoryofpayrollgainsinthenextfewmonths,hasstalled。

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Alloftheseproblemshadbeenapparentalready。

EveryoneknewthatGreecewasintrouble。

Andnoneofthismighthavematteredifmarketswerecheap。

Buttheyrenot。

TheyvepricedinanicelittleV-shapedrecovery,andtheycertainlyhaventpricedina1998-styleAsiandebtcrisishappeninginEurope,asBankofAmericaMerrillLynchstrategistMichaelHartnettreckonsthiscouldturnouttobe。

Sothetemptationforanyonewhosmademoneynow,istoselloutandtaketheirprofits。

Afterall,havingsufferedthrough2008,theydontwanttobewipedoutagain。

Sohowfarwillmarketsfall?

MycolleagueDominicFrisby,whoacknowledgeshesbeenbearishonthemarketforawhile,wonderedonWednesdaywhetherwewereonthevergeofanotherpile-up。

Therecouldeasilybeabouncetoday,particularlyiftheUSpayrollsfiguremanagestobeatexpectations。

Butnoneoftheseissuesaregoingtogoaway。

Evenifthisisjustacorrection,youcanexpectalotofthissortofvolatilitythisyear,whichiswhywellbestickingwithourdefensivestance。

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