The stock market is moving into official correction territory. Outflows from emerging market equity funds are in “panic” mode, as the Wall Street Journal puts it.
Tapering by the Federal Reserve and more attractive interest rates at home are hammering countries from Brazil and Turkey to India and Argentina. So are domestic economic and political concerns in those countries. Investors are also worried about growth and financial stability in China. The eurozone is still not healthy.
The Fed’s actions are based on stronger growth in the United States. But another sign of the peculiar nature of the recovery is Wal-Mart’s warning today that its earnings will suffer in large part because of cuts to food stamps. Consumer spending grew 0.4 percent in December but incomes were flat.
Care to make a market prediction? Please do:
This Week’s Links:
• The trouble with emerging markets | Nouriel Roubini/Project Syndicate
• Jamie Dimon’s raise proves U.S. regulatory strategy is a joke | Matt Taibbi
• About that tainted seafood from Texas | Wired
• Farm bill draws lobbyist horde | BusinessWeek
• With epic backlogs at Boeing and Airbus, can business be too good? | BusinessWeek
• Democracy vs. inequality | Economist’s View
• And the taper continues | Tim Duy’s Fed Watch
• The U.S. economy today in the trans-Pacific mirror | Brad DeLong
Today’s Econ Haiku:
This given Sunday
Shameless gladiator hype
But it’s ours. Go Hawks