Stocks reel on 'R-word' return, Nikkei dives 12%
A look at the day ahead in U.S. and global markets from Mike Dolan
Whether the prospect of a U.S. recession is real or imagined, the mere return of the discussion has been enough to send world stocks and bond yields reeling just as AI doubts and a Japan-led volatility spike have barreled into holiday-thinned August.
And like many global selloffs before it, there's the risk of a self-feeding spiral amid a frantic search for "safe" bonds as speculation about hurried and dramatic interest rate cuts mounts.
Weekend news that Warren Buffett's Berkshire Hathaway BRKa.N appears to have soured on stocks, letting cash soar to nearly $277 billion and selling about half its stake in Apple AAPL.O, suggests the 93-year-old revered investor has grown wary of the broader U.S. economy and stock market valuations.
Shares in both Apple and AI-bellwether Nvidia .NVDA.O were down almost 10% ahead of Monday's bell.
And as Japanese stocks were one of Buffett's top plays of the past year, that has alarmed an already nervy Tokyo market.
After a torrid week last week, Monday saw the most withering stock rout in Japan since the 1987 crash, as the benchmark Nikkei .N225 dropped more than 12%.
Japan has its own very particular story of course - one of the most favoured stock markets of the past year, but one goosed by a plummeting yen JPY= that the authorities have spent several months trying to shore up.
And in a classic case of "be careful what you wish for", months of official intervention to buy yen and last week's second Bank of Japan interest rate rise of the year have finally succeeded - but it bowled over the stock market in spectacular fashion in the process.
And the yen swings have seeded turbulence around the world. As interest rate "carry trades" funded by cheap yen borrowing were a lucrative bet among speculative funds for the past two years, the sudden yen surge - which hit its best levels of a year on Monday - and the related volatility spike have sent a shockwave through this and other "risk" trades.
The anxiety spilled out across world markets again on Monday - with South Korea .KS11 and Taiwan .TWII both down 8% and European benchmarks down more 2%.
And it's going to be a rough open on Wall St.
With the Nasdaq now already in correction territory after last week's swoon, futures NQcv1 are pointing to further losses of about 4% on Monday and S&P500 Esc1 futures are down 2.5% ahead of the bell.
The VIX "fear index" of U.S. equity volatility .VIX soared - topping 40 for the first time since the 2020 pandemic lockdowns. A reflection of a reversal of risky bets, Bitcoin BTC= plunged 15% from Friday's levels, the Swiss franc CHF= surged to its best level of the year - but gold XAU= fell, curiously.
U.S. stocks' eye-watering retreat last week came in the thick of a noisy and somewhat disappointing Big Tech earnings season, with fears about an overspend in artificial intelligence and the lack of an end result yet gnawing at investors.
But the return of U.S. recession worries to a market overwhelmingly priced for a "soft landing" of the economy was the biggest game changer - following a series of weak manufacturing and labor market updates.
If past precedents on the pace at which the U.S. jobless rate is rising are applicable - and many think persistent post-pandemic labor market distortions mean they are not - then a triggering of the so-called "Sahm rule" recession flag on Friday was a moment.
Even though the rule's author, former Federal Reserve economist Claudia Sahm, played down the warning this time around, the calculus of a half-point rise in the three-month average jobless rate above the low of the past year stands as a warning nonetheless.
So much so, interest rate markets have scrambled.
Fed futures markets now see a half-point cut in Fed rates as soon as next month and as much as 125 basis points of cuts by yearend.
JPMorgan Now expects the Fed to cut rates by 50 bps at both September and November meetings, followed by 25-bps cuts at every meeting thereafter.
With U.S. 3-, 10- and 30-year auctions this week, Treasury yields and the dollar have plummeted. Ten-year U.S. yields US10YT=RR fell below 3.7% for the first time in more than a year, and have tumbled about 50bps this month already.
Two-year yields fell as low as 3.69% and the two-to-10-yield curve US2US10=RR steepened to within a whisker of positive territory for the first time in over two years - seen by some as a warning sign of recession ahead after two years of inversion.
Riffing over pumped-up Fed easing talk, the dollar index .DXY touched its lowest since March.
Critical now will be readings from the U.S. service sector later today, a reality check from Fed speakers and also the release of the Fed's quarterly senior loan officer survey.
Key developments that should provide more direction to U.S. markets later on Monday:
* U.S. July service sector surveys from ISM and S&P Global. Fed's quarterly senior loan officer survey
* San Francisco Federal Reserve President Mary Daly speaks
* U.S. corporate earnings: Tyson Foods, CSX, ONEOK, Diamondback Energy, Realty Income, Simon Property, Williams
* U.S. Treasury sells 3-, 6-month bills
'Sahm Rule' Trigger Revives Recession Debate https://tmsnrt.rs/3ynjQzB
Japan stocks enter bear market https://tmsnrt.rs/3LVcuXb
European equities hammered in global sell off https://reut.rs/3SEjFH4
Berkshire has narrowly beaten the S&P 500 since 2019 https://reut.rs/3AeUd4i
US ISM services sector survey eyed https://reut.rs/4cPY9Xv
By Mike Dolan, editing by Mark Heinrich
mike.dolan@thomsonreuters.com
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
