Stocks, Yields Extend Drop After EU Slashes Growth Outlook

Surprise!

The European Commission slashed previously hope-filled economic growth forecasts for the region this morning.

Most notably, the Euro-area GDP growth forecast for 2019 cut to 1.2% from 1.3% prior with Germany slashed to 0.5% from 1.1%.

“As initial deadlines for U.S.-China trade negotiations and Brexit have passed without resolution, various uncertainties continue to loom large,” the European Commission said in its quarterly report. “An escalation of trade tensions could prove to be a major shock.”

The cut prompted buying in bonds (with Bund and Treasury yields sliding)...

The euro weakened as officials in Brussels warned that the downside risks to the region’s outlook remain “prominent.’’

And sent stocks to the lows of the day...

Additionally, and not helping matters much, Eurogroup President Mario Centeno said at a Bloomberg event in Brussels on Tuesday that:

"I hope that the next crisis is not of the same sort as the last one."

Did the crisis ever actually end? Or were Draghi's band-aids just masking the symptoms?