Well it’s Sunday which means that all else equal (not a safe assumption in a world run by a “very stable genius” who refers to himself in the third person in scare quotes), tomorrow will be Monday.
Given how things played out on Wall Street to close the week, U.S. investors will be watching overseas markets nervously for clues as to whether we’re about to get trapped in that nightmare loop where it becomes impossible to discern who’s taking their cues from who.
That is, are overseas markets catching up to the Wall Street rout and therefore U.S. stocks can reset now that everyone is on the same page, or should Wall Street take any overseas weakness as a leading indicator that the selloff is going global and therefore take that as a reason to keep on selling. And shit, let’s be honest, we were already in that situation last week. Remember, China had an abysmal go of it:
And the DAX found itself in all kinds of trouble as German stocks posted their worst week since February 2016:
More broadly, the EuroStoxx 50 fell through its 200-DMA on Friday just a day after breaching its 50-DMA:
All of this hinges to a certain extent on whether DM yields continue to rise and of course on what the dollar does.
So it’s with that as the backdrop that we wanted to take a quick look at Mideast markets on Sunday and generally speaking, it’s not pretty. “Markets in the Middle East are correcting after the negative performance of international markets over the weekend,” Marwan Shurrab, head of high net-worth and retail equities brokerage at Al Ramz Capital in Dubai told Bloomberg, adding that “there is selling pressure and profit-taking across the board.”
Yes, “across the board” and in Qatar (a powder keg for geopolitical uncertainty since last summer), the pain is particularly acute with the QE falling nearly 3%:
All 20 members on the benchmark fell.
Dubai’s DFM General declined to its lowest level in a month:
Saudi shares held up reasonably well, but still fell 0.7%:
And in Israel, the TA-35 is down sharply:
So again, the question is always whether everyone is playing catch up or whether a global rout ends up feeding back into its source which then throws gas on the fire on the way to making it impossible to distinguish which markets are leading indicators and which are simply responding to what happens elsewhere.