18 August 2011
“The reason is people’s awareness that low economic growth and high inflation can cause another recession”.
According to the recent U.S. data, more Americans were on the unemployment line last week than a week earlier. Moreover, consumers were under even more pressure because of higher gasoline prices.
Higher prices and higher unemployment level mean that consumers will cut their expenses, especially, in case of gasoline.
Traders also keep an eye on developments in Europe. The problem is that a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel did little to assure the world the European debt crisis is over. Greece, Ireland and Portugal have faced more debt problems than other countries. Worries that further bailouts might be required for Italy and Spain caused a last week decline on stock markets.
And although Canadian economic news was more optimistic, the global fears affected it as well. TSX closed down 392 points or 3.12%.