Teh One Who Knocks
01-07-2016, 11:42 AM
Dow Jones News Wire
http://i.imgur.com/QqxUhB3.jpg
As of 6:00 a.m. ET, Dow Jones Industrial Average futures were 392 points lower, or 2.34% to 16444. S&P 500 futures fell 49 points, or 2.43% to 1938, while Nasdaq 100 futures declined 138 points, or 3.11% to 4308.
(The following is the original story published by Dow Jones Newswires)
Steep falls in Chinese equities pummeled global markets on Thursday, as widening concerns over the world's No. 2 economy pushed investors out of shares, oil and metals.
The selloff came after the People's Bank of China made its largest downward adjustment to the yuan since August, a move that sent the country's stock market down over 7% amid concerns about capital flight from the Asian giant.
"A very large connected economy is a hard bullet to dodge for all equity markets," said Nicholas Melhuish, head of global equities at Amundi Asset Management.
China's stock markets stopped trading after only 30 minutes, ending the shortest trading day in their history after a newly installed mechanism to limit volatility was triggered for the second time this week.
Pessimism spread quickly, with Japan's Nikkei Stock Average, Australia's S&P/ASX 200 and Hong Kong's Hang Seng Index each losing over 2%.
European stocks opened to steep losses. The Stoxx Europe 600 was down 3.4% in midmorning as energy and basic resources shares tumbled.
Futures pointed to a 2.5% loss for the S&P 500. Changes in futures markets don't necessarily reflect moves after the opening bell.
Fears about China spread to commodity markets, sending Brent crude oil down 2.3% to $33.42 a barrel, nudging higher after sharper earlier falls amid concerns about future demand from the world's second-largest consumer of crude. Metals were also down, with copper falling 2.5%.
As the price of resources tumbled, commodity-linked emerging markets all took a hit. South Africa's rand currency fell to an all-time low against the dollar, falling to 16.22 to the dollar.
In Europe, China-exposed mining and energy sectors were leading the losses, with the sectors down 5.2% and 4.2% on the day respectively as oil prices lingered near multiyear lows.
Shares in Anglo American PLC were down 9.3%, Tullow Oil PLC was down 5.6% and Glencore PLC was down 4.3%.
The first week of trading of the year has been dominated by China, after markets opened on Monday to a weaker yuan and lackluster Chinese data manufacturing data.
As investors flee more risky assets, so-called safe-haven investments have gained. Gold was up 0.4% at 1096.60 in London trading. U.S. 10-year Treasury yields were down 0.04 percentage point at 2.129%. Germany's 10-year yield was 0.03 percentage point lower at 0.480%, a one month low. Yields fall as prices rise.
In currencies, the onshore Chinese yuan broke to its lowest since 2011 against the dollar. The euro gained 0.6% against the dollar at $1.0840, while the dollar was down 0.9% against the safe-haven yen at Yen117.6660.
Investors cited the yuan's devaluation as a major trigger for Thursday's markets drama. In addition to what it signals about China's economy, analysts worry that a devaluation on the yuan will push neighboring countries to lower their currencies while dampening Chinese demand for imports and further hurting confidence in the country's economy.
"The interpretation is that the currency market manipulation tells you the economy is doing worse than expected," said Johan Javeus, chief strategist at SEB Group. "Maybe growth is slowing faster, and that's something we're concerned about outside China."
Thursday's Asian declines had also followed steep losses on Wall Street, where weaker oil prices and fears around China sent Dow industrials to a three-month low.
U.S. investors also grappled with the latest minutes from the Federal Reserve's December policy meeting, released Wednesday, after officials moved to raise benchmark interest rates for the first time in nearly a decade.
The minutes revealed some concern among Fed officials that inflation would linger below their 2% objective.
"For people who've come back to work from the holidays, we've just had a reality check," said Alastair George, chief strategist at Edison Investment Research. "We see the Fed tightening...then further down growth to come in globally exposed sectors and high valuations," he said. "It's not exactly an environment in which people want to take on risk."
Amundi's Mr. Melhuish said he expects a tough first half of the year with a lot of volatility. Many of the issues that plagued global equity markets last year, including shifts in the Chinese economy, trouble in emerging markets and a slowly tightening Federal Reserve, have already surfaced in the first sessions of the year.
Adding to doubts, the World Bank on Wednesday cut its growth forecasts for the third straight year, pointing to a worsening outlook for emerging markets.
"It could be quite a volatile year with a lot of issues lingering from last year brought to the fore in the first week," Mr. Melhuish said.
http://i.imgur.com/QqxUhB3.jpg
As of 6:00 a.m. ET, Dow Jones Industrial Average futures were 392 points lower, or 2.34% to 16444. S&P 500 futures fell 49 points, or 2.43% to 1938, while Nasdaq 100 futures declined 138 points, or 3.11% to 4308.
(The following is the original story published by Dow Jones Newswires)
Steep falls in Chinese equities pummeled global markets on Thursday, as widening concerns over the world's No. 2 economy pushed investors out of shares, oil and metals.
The selloff came after the People's Bank of China made its largest downward adjustment to the yuan since August, a move that sent the country's stock market down over 7% amid concerns about capital flight from the Asian giant.
"A very large connected economy is a hard bullet to dodge for all equity markets," said Nicholas Melhuish, head of global equities at Amundi Asset Management.
China's stock markets stopped trading after only 30 minutes, ending the shortest trading day in their history after a newly installed mechanism to limit volatility was triggered for the second time this week.
Pessimism spread quickly, with Japan's Nikkei Stock Average, Australia's S&P/ASX 200 and Hong Kong's Hang Seng Index each losing over 2%.
European stocks opened to steep losses. The Stoxx Europe 600 was down 3.4% in midmorning as energy and basic resources shares tumbled.
Futures pointed to a 2.5% loss for the S&P 500. Changes in futures markets don't necessarily reflect moves after the opening bell.
Fears about China spread to commodity markets, sending Brent crude oil down 2.3% to $33.42 a barrel, nudging higher after sharper earlier falls amid concerns about future demand from the world's second-largest consumer of crude. Metals were also down, with copper falling 2.5%.
As the price of resources tumbled, commodity-linked emerging markets all took a hit. South Africa's rand currency fell to an all-time low against the dollar, falling to 16.22 to the dollar.
In Europe, China-exposed mining and energy sectors were leading the losses, with the sectors down 5.2% and 4.2% on the day respectively as oil prices lingered near multiyear lows.
Shares in Anglo American PLC were down 9.3%, Tullow Oil PLC was down 5.6% and Glencore PLC was down 4.3%.
The first week of trading of the year has been dominated by China, after markets opened on Monday to a weaker yuan and lackluster Chinese data manufacturing data.
As investors flee more risky assets, so-called safe-haven investments have gained. Gold was up 0.4% at 1096.60 in London trading. U.S. 10-year Treasury yields were down 0.04 percentage point at 2.129%. Germany's 10-year yield was 0.03 percentage point lower at 0.480%, a one month low. Yields fall as prices rise.
In currencies, the onshore Chinese yuan broke to its lowest since 2011 against the dollar. The euro gained 0.6% against the dollar at $1.0840, while the dollar was down 0.9% against the safe-haven yen at Yen117.6660.
Investors cited the yuan's devaluation as a major trigger for Thursday's markets drama. In addition to what it signals about China's economy, analysts worry that a devaluation on the yuan will push neighboring countries to lower their currencies while dampening Chinese demand for imports and further hurting confidence in the country's economy.
"The interpretation is that the currency market manipulation tells you the economy is doing worse than expected," said Johan Javeus, chief strategist at SEB Group. "Maybe growth is slowing faster, and that's something we're concerned about outside China."
Thursday's Asian declines had also followed steep losses on Wall Street, where weaker oil prices and fears around China sent Dow industrials to a three-month low.
U.S. investors also grappled with the latest minutes from the Federal Reserve's December policy meeting, released Wednesday, after officials moved to raise benchmark interest rates for the first time in nearly a decade.
The minutes revealed some concern among Fed officials that inflation would linger below their 2% objective.
"For people who've come back to work from the holidays, we've just had a reality check," said Alastair George, chief strategist at Edison Investment Research. "We see the Fed tightening...then further down growth to come in globally exposed sectors and high valuations," he said. "It's not exactly an environment in which people want to take on risk."
Amundi's Mr. Melhuish said he expects a tough first half of the year with a lot of volatility. Many of the issues that plagued global equity markets last year, including shifts in the Chinese economy, trouble in emerging markets and a slowly tightening Federal Reserve, have already surfaced in the first sessions of the year.
Adding to doubts, the World Bank on Wednesday cut its growth forecasts for the third straight year, pointing to a worsening outlook for emerging markets.
"It could be quite a volatile year with a lot of issues lingering from last year brought to the fore in the first week," Mr. Melhuish said.