On Sky Business this afternoon James @Daggar-Nickson, John Noonan and I discussed the rout in equity markets. Frankly, I'm baffled, although that's often the case at market extremes. I want to know two things:

 

 

 

 

 

 

 

  1. Why are equity markets selling off?
  2. Are the following markets a buy, a sell, or some of each?

 

You can have your say in the comments section below.

The markets are ranked by performance from the 2015 peak to the 2016 low. Anyone arguing rising US rates are the cause needs to explain why the US markets are performing best.

20160210 spx

Despite what feels like relentless pressure, the next best of the four is Australia. This may reflect the fact that the Australia 200 Index did NOT make a new high after the GFC.

20160210 xjo

We know that volatility in Japan is high, so no it's surprise that it has a wider high to low.

20160210 nikk

Perhaps the more surprising market is the Germany 30. Despite record levels of central bank stimulus, and negative interest rates, there are investors fearing a liquidity crisis in Europe!

20160210 dax

So, I'm looking for explanations. If you'd like to argue that low oil prices are the cause of the sell off in banks, please include an explanation of how an industry that accounts for less than 2% of all bank exposures is imperiling the global financial system.

So.

 

 

 

 

 

 

 

  1. Why are equity markets selling off?
  2. Are these markets a buy, a sell, or some of each?