Australian dollar hits a new session low alongside stocks. Why sentiment is worsening
AUD/USD down 46 pips to 0.7320
The mood continues to sour in markets and it's pulling down the Australian dollar and US equities. The S&P 500 is down 29 points to 4440 after opening 10 points higher.
The price action in stocks is concerning. At this point, everyone expects every dip to be bought and something is wrong when that doesn't happen.
What's particularly worrisome is that no one can seem to point to a clear catalyst for the change in tune. Lower yields and lower inflation today is inarguably good news for risk assets yet they're struggling.
I don't think any of this is about the Fed. Who really cares whether they taper in November or December?
I'm worried about China. I wrote about some of the issues there earlier today and that could be a major drag on global growth.
Another potential drag is bottlenecks, which I also wrote about today. If the sales of other items track autos then some serious pain could be ahead.
For now, I don't see the need to be overly worried but price action is concerning.