The keynote FOMC speaker at the Jackson Hole convention indicated that a September rate hike was still possible. Other FOMC members throughout the week offered supporting and differing opinions. The countdown to mid September is finally starting to grip “investors.”
Stocks fell 0.8% in Asia Monday, 0.3% in Europe, and 0.6% in the U.S. on moderate volume. Oil shot up 8% higher to close at 48.75. Stocks fell sharply around the world Tuesday — in Asia 2.3%, in Europe and in the U.S. 2.8% on moderate volume. The VXO spiked 16% to close at 30.78. NYSE closed below 10,000 again.
Wednesday, stocks fell in Asia 0.7%, rose slightly in Europe, and 1.4% in the U.S. on moderate volume. That was just enough to move the NYSE Index just above the 10,000 mark again. The VXO plummeted 16% to erase the gain of the previous day and close at 25.90.
Thursday, stocks rose slightly in Asia, but in Europe and the U.S. they ramped up for strong gains of 2.4% and 1% respectively but by the time of the close the U.S. stocks had just managed a 0.4% gain for the day on moderate volume. The brief bubble driver this time was a statement from Draghi saying basically that the ECB would include a greater percentage of securities in its planned massive QE .
Friday, stocks lost more ground the world — 1% in Asia, 2.5% in Europe, and 1.8% in the U.S. on moderate volume. That pushed the NYSE Index well below the 10,000 benchmark again. The VXO rose 9% to close at 28.04, and the 10-Year U.S Treasury Bond yield moved 2% lower to close at 2.13%. For the week, stocks gave up almost 4% while fear held steady.