Yesterday marked the five-year anniversary of the S&P’s recession closing low of 676.53. The index set a fresh high on Friday, but has slipped back today, as the US stock market followed the retreat of bourses from around the world in the wake of this weekend’s surprisingly weak trade data from China.
Chinese exports, which analysts had expected to grow in February, declined 18.1%. This is a fairly shocking result, and it has sent shockwaves of concern about the state of the global recovery rippling through financial markets around the world.
Had there been any US –based macro-economic reports out today, there might have been some kind of counterweight to the disappointing China reports, but with a dearth in that regard, investors have begun some defensive selling. By early afternoon in New York, the Dow Jones was down 0.33% or 55 points at 16,397 and the S&P 500 was off by 0.21% at 1874.1.
A fall in Chinese exports holds a particular concern for US investors, as the US is a major importer of Chinese goods and this now raises a few worries about how Thursday’s retails sales data for the US will look. No doubt the weather-related excuses are being dusted down in readiness for another outing.
Charles Plosser, the President of the Philly Fed, joined the chorus of voices citing the weather as one of the causes of the softness seen in the last few employment reports. ‘These numbers most likely reflected in part the effect of the unusually severe winter weather,' he said in a speech at the Bank of France in Paris today.