Global stock markets slide as demand disappoints

Stocks Jun11.pngIt is now 5 weeks since the IeC Downturn Alert was launched. The chart above therefore updates the blog’s regular review of financial markets, showing how these have moved over the same period.

Most are down around 4%-5%. Russia is the worst performer (down 8%) and Brazil the best (down 3%). But government bond prices (light green column) have risen in the major countries, causing yields to fall, as investors focus on ‘return of capital’, rather than ‘return on capital’.

Petchem markets were relatively quiet over the week, with public holidays in the US/UK, and China’s Dragon Boat holiday today. ICIS reporters noted, however, that sentiment continued to weaken.

Europe. PE, “stocks in Asia and Europe are widely agreed to be at high levels”. Olefins, “more risk of a downside than seen previously”.
China. PTA, “persistently weak export of polyester products”;
India. Polymers, “demand in the local PE and PP downstream sector is still looking bad”.
USA. PVC, “global demand has weakened”. PE, “traders saying now is not the right time to be purchasing cargo from US suppliers, given the low cost of material from Asia and the Middle East”.

The blog will look in more detail at developments in China tomorrow, and in oil markets on Wednesday.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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