Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

Behind the selloff: lack of confidence in central banks

Friday, February 12, 2016 - 03:07

Following the Bank of Japan's move to negative rates, lack of confidence in central banks is the chief factor behind the U.S. stock selloff, says Lee Ferridge of State Street Global Markets.

▲ Hide Transcript

View Transcript

Financial energy stocks sparked a modest rebound on Wall Street. Joining us now from Boston is leave there which he is head of North American macro strategy at State Street global markets while only. Pleasure to be here thank you answered to myself what's fueling the market rebound today it's pushing financial energy stocks higher. Nothing specific I think I mean we've just had oversee a very very difficult week there was no more bad news overnight. Oil came up a little bit so I think what we just getting a little bit of bounds but it does not a real fundamental entry read anything while. It based on the trade that you're seeing today is there any conviction in this read. No I wouldn't put it right in the store via adding this and squaring up ahead of the weekend. But I don't think as a say there's any real fundamental trigger is I think there's a great get a conviction and now. The banks are they taking center stage this week for the worst performing these actors here what's behind all this negativity this week. On the banks is it the thing of interest rate talk about central. I think so yeah I mean obviously there's been a lot of focus on the European central banks that. Over the course of this week and the other poor earnings numbers are saying there are direct results of the negative interest rates in Europe and so. Tool in the US of nags interest rates would by the way law a long way off if he had a very very low probability event but that's all in itself. Of C puts pressure on on the sector crucible. And Lee we've seen an extremely. Choppy trading this week do you expect some big washout in the next few weeks. I in the market's gonna stand the pressure on me essentially that in the volatility. Of the difficult markets received for the last nine months really. Comes down to the problem with global growth as severe lack of global growth. The markets in reactions that really since last August. You know there's no sign yet that that global growth is gonna turn around anytime soon so I think. Difficult volatile markets from beyond going to be the norm food for at least the next few weeks aside what do you think it'll take to get investors to jump back in the markets. That's a very good question. I think is stiff I think we need turn around in the economic dates and a may be a policy response and if it's difficult at this stage from the monetary policy side to see what response could be. Emotion policy is as sort of shed the burden or taken them the whole burden. Trying to send this around for a long time now so I think that's part of the problem this week is that a lot of investors available today went well. What can central banks do now here we saw the Bank of Japan went negative rights two weeks ago today. I really that that proved a very very simply rest but I think after that they the question was well what's left what can they do that in that lack of confidence. In the ability of central banks turnaround is really what's underpinning this. Are rightly thanks much for joining us. Appreciate. Are affected are actually fair to State Street global markets I'm Fred Katayama this is sort.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Behind the selloff: lack of confidence in central banks

Friday, February 12, 2016 - 03:07