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The U.S. economy has been hailed by market strategists as a humming engine that can lead the rest of the world. Investors aren’t so sure.
Stocks are taking a beating as troubling indicators start to pile up, sending U.S. and Canadian benchmark indexes deeper under water in 2015. Markets have been volatile for several months over concerns about the euro zone economy, falling commodity prices and shifting U.S. monetary policy.
But things turned particularly rough on Wednesday following a batch of unsettling developments, including weak U.S. retail sales and falling copper prices, rattling confidence even in the U.S. economy.
The S&P 500 fell 11.76 points or 0.6 per cent, closing at 2,011.27 and marking its fourth straight decline. For the year, it is down 2.3 per cent.
In Canada, the S&P/TSX composite index fell 102.7 points or 0.7 per cent, to 14,084.43. The index is down 3.8 per cent in 2015. Stocks fell hard in Europe and Asia as well, as investors rushed to the safety of government bonds, driving down yields.
The yield on the 10-year U.S. Treasury bond fell as low as 1.8 per cent during the day, to its lowest level in more than 18 months. The yield on the 30-year bond fell to a record low.
The Canadian 10-year government bond yield touched a record low, according to Bloomberg, while yields in Germany and Switzerland also sank to new lows. As yields fall, bond prices rise.
Part of the concern among investors is that U.S. consumers appear far more reluctant to get out and spend, even as they save money on refuelling their cars with cheaper gasoline.
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