Given what’s going on in Egypt, and spreading across not only that nation but the Middle East — reports are coming out of Jordan that people are taking to the streets there, too — nobody seems to much care about this morning’s GDP report or earnings.
It’s unfortunate for us that we taped today’s Markets Hub just before the protests in North Africa finally landed on traders’ radar. Since video coming out of Cairo and other Egyptian cities has started to hit CNN, Fox and CNBC, stocks have been cratering. Treasurys have been rallying, and crude has been rising as well. Egypt, after all, is home to the Suez Canal, a critical point for oil supplies (remember 1956?)
Crude futures are up more than 4% at $89.32/barrel, totally reversing in just a couple hours the losses of the past few days. Seems like these exogenous events always come out of left field. Who three weeks ago would’ve predicted a popular uprising in Tunisia that would spread across North Africa like wildfire? I bet most Tunisia’s wouldn’t even have predicted it.
The other thing to keep in mind is that stocks were primed for a sell-off, regardless of what happening in Egypt. The major indexes, the Dow and S&P 500, have been flirting with the 12000 and 1300 marks, respectively. Both were kissed, but not overcome. Markets appears ready for a big sell-off earlier this week, too. So some of this is just traders trying to get ahead of the inevitable, and marking profits now.
But the images coming out of Egypt are breathtaking, no doubt. Here’s today’s Market Hub, US edition: