For years the market has counted on friendly central bankers and lower interest rates to keep the market higher. Although low rates are generally a function of weak economic growth, the market has believed that we could have strong growth with no inflation and that rates could stay low.
This morning weak economic news caused a rush into the 'safety' of bonds which caused yields to collapse. Also, overnight several central banks cut rates with New Zealand cutting a half-point. This has triggered concern that maybe these falling rates have moved to the point where they are a negative. If central banks are willing to pay us to borrow funds then maybe those funds aren't worth all that much in a faltering economy.
The move in interest rates coupled with the trade war issue and big moves in currencies is causing market chaos this morning.
So far the S&P 500 ETF (SPY) is holding above Monday's low which is the key level but this is an extremely nervous market that is grappling with a number of major macro-economic issues.
Breadth is running 1400 gainers to nearly 5300 decliners and this movement in the indices makes it extremely difficult to engage in stock picking.
I'll be looking for stocks that are being unfairly sold in this mess but the problem is that they can continue to stay under pressure for a while. The market simply doesn't care about fundamentals when we have this sort of big picture problems.