Reuters Insider - Central banks to blame for selloff - strategist

Capital Management ADSITS

15/02/2016 06:59

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Investors lost confidence after some central banks 
                     cut interest rates below zero, say experts. That  
                     slammed bank stocks. Fred Katayama reports.       
 
 
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Transcript (May be auto-generated)

                 The massive market selloff this week sparked fear among some investors. US 
stocks entered into a correction, dropping more than 10% from their peak. 
Capital Management's Thomas Mingone: People are really nervous. You know I 
think, basically, there's concern over the banking system in Europe, there's 
certainly concern over the oil prices, and it's going to be a volatile market 
for a while. Behind the selloff, some central banks, like Japan's, cut interest 
rates below 0%. Lee Ferridge of State Street Global Markets: Part of the problem
this week is that a lot of investors have looked at it and went, "Well, what can
central banks do now?" The negative rates, which Fed Chair Janet Yellen has not 
ruled out, slammed shares of banks which make more money when rates rise. S&P 
500 financials, down 18% this year, are the worst performing sector in 2016. 
JPMorgan Chase CEO Jamie Dimon, in a show of confidence, bought more than $25 
million worth of his own bank's stock on Thursday. Next week: watch China's 
currency, the Yuan, as its market reopen following the Lunar New Year holidays. 
The fear is that, if China devalues their currencies or continues to weaken 
their currency, that's a sign of slowing economic growth in China, it puts 
pressure on the rest of Asia, and that quickly feeds through into the rest of 
the markets. Key to getting investors back in, Ferridge says, is a turnaround in
economic data amid concerns of global growth