tumbled after reports in new about asbestos in talcum powder. In today’s Intraday Update, we…
- …take a look at a possible synchronized global growth slowdown;
- …wonder if the S&P 500 can hold support at 2600;
- …and observe that multiple sectors have already broken down.
Disappointing economic data in China and Europe have added to fears about a growing slowdown and helped sink the market today.
Remember when everyone was talking about a global synchronized growth? Well, now we have a global synchronized growth slowdown. China’s industrial production and retail sales data disappointed, while over in Europe, Germany’s so-called Flash PMI, a survey of manufacturing activity, fell to its lowest level in four years. And even the U.S. data, though good in spots, leaves much to be desired.
What’s amazing is how well the market has held up, despite the recent volatility. But that may changing. The S&P 500 looks like its ready to test 2600, before going after the February and April lows around 2580. If those break, it could mean trouble. Evercore ISI’s Rich Ross, however, notes that the market has already broken when looked at from the inside. ”While critical support continues to hold, the Index is already broken internally with the Financials, Energy, Industrials, Transports, Truckers, Retailers, and Russell all making new lows, while only the commensurate rotation into Defensives has prevented a nominal breakdown below well-defined support,” he writes.
But that could come any day now.
Write to Ben Levisohn at Ben.Levisohn@barrons.com