(New York)

Over the last few weeks the US stock market had looked strong. Stocks had shrugged off a number of geopolitical disturbances with relative ease. However, suddenly, a lot of macro signs are looking poor. The combination of European political turmoil, weaker growth, and a sudden drop in US bond yields, are all coming together in a package that shows things are not as rosy as they might have seemed a few weeks ago. While European sovereign spreads are widening to the largest since 2013, US Treasury yields are plunging and are now well below 2.9%.

FINSUM: This might be the start of a very rough summer for markets, and how fitting that it all began on Memorial day. While some might say “It’s just Italy”, Europe has proved enough to scuttle global markets in the past (see the summers of 2011 and 2012).