More than $11 trillion was lost in global equities prices in the quarter ending Wednesday.
Naturally all markets rally today on the window dressing that occurs on the last day of a month, quarter or year.
That $11 trillion is not lost on all market players. As traders go in and out of stocks to eke out profits in a down market. No the everyday people, who are advised to stay in the market for the long haul are the big losers. Retirement accounts have taken a beating this quarter since most are not actively managed to cut losses.
So we enter the cruelest month for the markets — October — with an US monthly payroll report on Friday.
BTW, I still have Glencore on my radar, despite stories floating around that the firm may go private as the stock rallied briefly. Again who or what will backstop the huge losses on the company’s books? The Fed? The ECB?
Europe’s economy slipped into negative inflation, which by any measure means deflation. Central banks across the globe fear a deflationary spiral, since they have no ability besides further easing to combat it.
Bit what does that mean for the consumer? Less debasement of currency as prices fall. Pricing power moves to the consumer. Why buy a washer and dryer today, when it could be cheaper next week.
It’s not a draconian event for consumers — in the short term — but can lead to layoffs if it persists from a longer period of time.
So enjoy it while it lasts.