21 May 2010 Uncertainty Back Again?

Yesterday represented the seventh down day in a row for the S&P 500’s, putting the average just 6 points above the low it reached during the technical panic of May 6^th. It is 10.2% off its recent high of April 23^rd and 3.9% down for the year. Long term US Treasuries on the other hand are up 9.5% since the high and 11% so far this year. Selling over the past three days was amplified when German Chancellor Angela Merkel banned some types of speculation against government bonds and financial institutions. The move was ill-received by investors in general but particularly in Europe as traders there drove the Stoxx Europe 600 Index down 7.2% in just three days. Other governments have not followed suit with the ban.