The IMF is concerned about global growth. The IMF’s forecast for global growth was revise down to 3.3% this year and 3.6 % for 2013. How to Cope with high debt and sluggish growth should be USA and European area main concern.
According to the released document, the current economic recovery is not enough to turn around the employment situation in advanced economies. Along with the high unemployment in this economies, the INF highlights that ” …The financial system is
still not functioning efficiently and that in many countries, banks are still weak, and their positions are made worse by low growth.”
Wall street negative reaction to the IMF release, was reinforced with the downgrade of Intel. Which triggered a sale off in other companies in the same techno industry. The downgrade comes as weak demand in Europe and China continue to be the main cause for companies to expect lower growth in the coming quarter.
In the other hand, Wall Street chart was also pointing to a retreat, which could be consolidated in the coming week as more companies report their quarterly earnings and revenue. Investor will be looking for the companies expectation for the coming year and how much work at hand is in the books.
Investor that have been in the last upturn long enough, will most probably take today as a signal to take some profit out of the market. We could see more short trade in place this and next week. if the situation deteriorates further, some trader could be force to sale stock that was bought a bit to high.
This new retreat could bring new opportunities, so patient will be needed.