US stocks tumbled again on Wall Street almost wiping out gains of a relief rally only 24-hours earlier. The main trigger was concern about the health of French banks and another possible euro zone debt victim.
The Dow Jones ended down 4.6 per cent – its lowest level in almost a year.But experts see the problem as political rather than financial.
Jason Weisberg of Seaport Securities said:
“ Look at the end of the day, earnings have been great this quarter. Earnings have been amazing, guidance going forward is amazing. I think this has more to do with the political structure. People are looking for some form of confidence boost from the White House and the overall political machine, the investment community is not getting it and that’s what you see in the market place.”
Managing Consultant Mark Turner added:
“ I blame the bankers, I blame the global economy as a front. I can’t blame Obama because he really didn’t make the problem, he is just trying to make, create a solution for it, and everybody is waiting to see what’s going to happen with that, if anything at this point. But ultimately as things go on, everything will come out.”
But with market volatility continuing, Gold is reaching record highs. And US Treasury bonds are still viewed as a safe place to stash cash, making a mockery of Standard and Poor’s down grade.