As the Yanks eyed off their Memorial Day long-weekend, Wall Street ended lower after being up early. And once again there seems to be no enthusiasm for a big sell off.
The S&P 500 gave up 1 point to close at 887.
And while there is nothing dramatic to report, the fear index or VIX has gone up over 30 after dropping below this level for the first time since Lehman Brothers went under.
Even though many informed commentators, me included, see the debt ratings agency matter of the UK and the USA possibly losing their AAA status as an overreaction, this has unsettled the market.
By the way Moody’s, another debt ratings agency, says it is comfortable with the AAA status of the USA. However, next week will be critical to see if bears and short-sellers want to run with this issue. Remember, plenty of investors don’t trust the current rally and there are profit-takers who could spark a sell-off.
Yesterday I saw Dr Chris Caton from BT present and he is pretty optimistic but says a 10-15% sell-off is possible, but he does not think we will go back to March lows.
He also thinks the Government’s Budget forecasts were too pessimistic and unemployment will peak just under 8%.
By the way, the Americans did record some pretty good retail figures on Friday. Go those better-than-expected economic numbers!
There will be some good economic data this week here and in the USA, but the Yank’s preliminary GDP numbers for the March quarter on Friday is the biggie.
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