The volatile markets experienced in the last few weeks have resulted in
short selling bans in a number of European countries. France, Spain,
Italy and Belgium have imposed short-selling bans starting today.
The crisis in Europe has seen policymakers look for scapegoats and once again the markets are readily available. Financials have been under siege in recent weeks and Societe Generale in particular has been subject to speculative selling as rumours spread earlier this week that it has trouble.
Is short-selling really the way to go when confidence is waning, or will it just confirm in the minds of investors the feeling that something is wrong? The history has plenty of examples of the latter being the case, as seen in the subprime crisis turned Great Recession, which did not exactly arrest declines and uncertainty. And to boot, France just reported a miserable flat GDP for the second quarter on expectations of a 0.3 percent increase. No, there is nothing to see here. Move along please!
U.S. Retail Sales set to increase: the weakness displayed by consumers in the second quarters is not expected to continue in July according to consensus, which expects sales at the retail levle to grow 0.5 percent month-on-month after a weak 0.1 percent print in June (Retail Sales are not inflation-adjusted). Yesterday's surprise widening of the trade deficit in the U.S. ($53.1 billion vs. 48bln expected and 50.8bln prior) will see 2Q GDP be revised down, likely even below 1 percent, when the first revision is released in a few weeks. And while such a revision only confirms the wakness in the second quarter, it also means that a pick up in consumer spending will translate into a better 3Q GDP print.
The crisis in Europe has seen policymakers look for scapegoats and once again the markets are readily available. Financials have been under siege in recent weeks and Societe Generale in particular has been subject to speculative selling as rumours spread earlier this week that it has trouble.
Is short-selling really the way to go when confidence is waning, or will it just confirm in the minds of investors the feeling that something is wrong? The history has plenty of examples of the latter being the case, as seen in the subprime crisis turned Great Recession, which did not exactly arrest declines and uncertainty. And to boot, France just reported a miserable flat GDP for the second quarter on expectations of a 0.3 percent increase. No, there is nothing to see here. Move along please!
U.S. Retail Sales set to increase: the weakness displayed by consumers in the second quarters is not expected to continue in July according to consensus, which expects sales at the retail levle to grow 0.5 percent month-on-month after a weak 0.1 percent print in June (Retail Sales are not inflation-adjusted). Yesterday's surprise widening of the trade deficit in the U.S. ($53.1 billion vs. 48bln expected and 50.8bln prior) will see 2Q GDP be revised down, likely even below 1 percent, when the first revision is released in a few weeks. And while such a revision only confirms the wakness in the second quarter, it also means that a pick up in consumer spending will translate into a better 3Q GDP print.
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