Under considerable selling pressure at the moment, it appears the equity market bull cycle may be coming to an end; however, the Fat Lady hasn’t sung. The Banks are key to our making a Bear call.
Indications from UK and European markets this morning are that broad market selling pressure continues, particularly in the commodity-related stocks like Oil & Gas and the Mines & Metals. However, the Bankers seem to be hanging in.
In Germany, Deutsche Bank is presently up +0.4% although it is still a tad weaker than many of its peers. DB is critical. The company is undergoing a huge restructuring and needs time to finish it.
If the broad market collapses at this point, DB would be in serious difficulty, which would put the humongous futures market and the future of European Union also in immediate jeopardy. I don’t think the powers that be are ready for that blow to the global financial system, which if it happens will be worse than the great debacle of 2008.
So, the tell will be the international Banks, and the good news is that these stocks appear to be hanging in.
All the best,
/Bill
