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Fasdal: Are markets heading for the perfect storm?

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Saxo's Simon Fasdal looks at the new risk factors that have hit markets. He says the almost 30% drop in Glencore's stock was a shock factor. Bonds continue to trade lower today because he says the market believes they will be stripped of their investment grade rating.

Volkswagen too has spooked the markets with increasing concerns for the rest of the automobile industry. 

Another major risk factor which Simon focused on last week, is Brazil. Although the real has stabilised, other markets are still showing signs of severe stress. He points out that bond markets are trading at high yields while credit default swaps are spiking at 545.

Simon concludes that investors must be extra cautious. If we see the combined escalation of Glencore and Brazil, he warns that we are looking at a perfect storm for financial markets.