The latest economic measures paint a picture of a global recovery that has slowed to an alarming degree, and raise fears that commodity prices have further to fall, setting the stage for more volatility ahead – particularly for Canada’s commodity-sensitive benchmark index.
Investors fled from stocks and commodities Thursday amid disappointing reports from virtually every corner of the globe, testing the confidence of the markets at a time when the health of the world economy is already threatened.
In the troubled euro zone, a manufacturing report fell to its lowest level in three years and included a weak outlook for employment. “With labour components continuing to deteriorate, it becomes even more painful for politicians to put in place these austerity measures,” said Stéfane Marion, chief economist and strategist at National Bank Financial.
Along with the weak economic reports, two analysts from Goldman Sachs Group Inc. recommended that investors sell short the S&P 500 – or bet that the U.S. benchmark index will fall – adding one more reason to shy away from stocks.
Read more: Bad news spurs global market plunge - The Globe and Mail
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