Economic status in Asian countries and Euro zone debt crises caused stocks on major world markets to fall last Monday. Investors over Asia are worried about the disappointing economic data, while EU financial ministers met to deal with the EU debt crisis.
Wall Street stocks ended the day lower as investors were preparing for the start of corporate earnings reporting for the second quarter. Weak inflation rate at China and reduction in machinery goods orders at Japan contributed to bleak U.S. job reports last Friday. These also raised concerns for the global economy.
Doubts that a meeting among EU finance chiefs will result in further progress arose, while yields on targeted bonds for Spain and Italy moved up to unsustainable levels. Diplomats granted Spain another year to reach its deficit targets once it draws further budget savings during a finance ministers meeting in Brussels. Extreme pessimism overshadows optimism these days due to several reasons, according to Randy Frederick, managing director at Charles Schwab.
“Although structural issues in Europe are far from resolved, it appears that the threat of a near-term market meltdown has been somewhat alleviated for now.” Policymakers are also pushing their efforts to boost the economy and minimize losses.
Earlier in the season, the Euro recovered against the U.S. dollar in a technical rebound from a two-year low. It reached 0.2 percent against the dollar at $1.2314 after it rose to $1.2324 and $1.2255 in the early trade.