Stocks snapped a 5 day up trend with the Dow down 109 points to 16,964. Trading volume was lower on the day. Stocks appear to have been led lower by oil.
Stocks on the Heng Seng and Shanghai exchanges were mixed last night after China reported the biggest year-over-year decline in exports since 2009. In February, Chinese exports were off 25% while imports fell 14%. These numbers were much lower than expected and offset the rosy tone set over the weekend by leadership at its economic summit.
Two weeks ago China also announced it was laying off 1.8 million workers in its coal and steel industry. The move is seen as accomplishing two things. One is to lower air pollution levels and the other is to address overcapacity issues which have hammered global prices and caused the US and Europe to impose tariffs on steel from China which is being dumped at prices below production. The Chinese economy is now running at its slowest pace in 25 years and the move to cut jobs and production is a signal that they are starting to grapple with the ills affecting the economy. Could this be a sign that a bottom is near? The gurus are now sure saying the recent price spike in iron ore is sentiment driven while the supply demand fundamentals remain negative. Other gurus are worried that more stimulus spending in China will add to global debt levels which will eventually need to be paid back.
WTI Crude fell 4.3% to close at $36.24 per barrel. Gold ended the day off $2 an ounce as profit takers swooped in. Gold closed at $1,262 an ounce.