On Friday, we found out that the Eurozone’s painfully slow economic recovery continued for another quarter. Surprisingly, the growth was fuelled by better performances from some of the peripheries, although France did well, too, as it expanded 0.3% over the quarter.
The Federal Reserve with its historic ending of quantitative easing seemed almost hawkish and perhaps a bit oblivious to the impact that the ending of QE might have on the Europe and the rest of the world.
The eurozone countries have an imbalanced approach to jumpstarting their economies, relying only on monetary policy but failing to address fiscal issues such as punitive taxation and over-bloated entitlement spending.
A number of participants said growth “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of the Sept. 16-17 Federal Open Market Committee meeting released today in Washington.
The S&P 500 sank 1.5 percent to 1,935.09 at 4 p.m. in New York, the lowest level since Aug. 12. Today’s slide was the biggest in almost three weeks. Selling accelerated in afternoon trading as index futures contracts expiring in December slipped below 1,940, a level where two previous declines had ended earlier today.
The euro rose from its lowest in almost a year after Germany’s finance minister said comments by European Central Bank President Mario Draghi advocating support for euro-zone fiscal policy were “over-interpreted.”