The Global Market Cave-In and Where People Are Hiding

European markets caved in 3.5 % to 16-month lows on fears of further ECB rate cuts;and US stocks followed suit with the S&P 500 slipping 1.42% as falling oil prices and Fed rate increase worries,as well as the overseas weakness,rattled investors on Monday.Concerns are that,in a climate of negative interest rates in Europe and Japan,and prolonged dovish monetary policy,banks' profitability will be squeezed,said Jaisal Pastakia,investment manager at Heartwood Investment Management.According to Michael Bell,global market strategist at JP Morgan Asset Management,the market is pricing in a 50% chance of a European recession.
Both Brent crude and light sweet crude fell about 2.5% Monday,with Brent closing at 33.20 bbl and light sweet crude subsiding to the 30.12 mark.As for the safe havens,London spot gold peaked at 1176.66 an ounce at 1104 GMT,an increase of 0.3% on top of last week's 5 % gain;while NYMEX April gold settled up 3.5% at 1197.00 an ounce,and silver climbed 0.32% to 15.36 an ounce.*
Ian Taylor,CEO of Vitol Group B.V.,the world's largest independent energy trader,believes oil will stay low for the next 10 years.Brent crude will close the year out at 48.00 bbl,Mr.Taylor predicted.The Rotterdam,Netherlands company ships more than 270 million tonnes of crude a year in its fleet of 200 supertankers and other ships.*
Gold has made a spectacular move the past 20 days,said Frank Holmes,CEO of US Global Investors.World trade is still in negative territory,and negative real interest rates are helping gold.As well,there is a strong physical demand for bullion worldwide.US gold coin dealers had their second-best year ever in 2015,despite the price of gold having declined last year.I think it's going to continue to do much better this year than last year,unless some catastrophe happens around the world.China needs to back 3% of its currency with gold,buying all new mine supply.I think 1100 an ounce is the floor price,and it could easily go to 1500 and ounce,Mr.Holmes projected.*
We think there is more upside,said ETF Securities analyst Martin Arnold.The next big level is 1200,but it may take a while to test it.*
The rare stocks that did well in the Dow Jones Industrial Average included Exxon Mobil;Chevron;Apple;Procter&Gamble;and Johnson&Johnson.*
Exxon Mobil (XOM);Apple Computer (AAPL);Procter&Gamble (PG);Johnson&Johnson (JNJ);Chevron (CVX);iShares MSCI Global Silver Miners ETF (SLVP);iShares MSCI Global Gold Miners ETF (RING)