Wall Street Stocks On Course For Bloodbath
Washington (Aug 24) The global equity market rout continues, with the US index futures pointing to a notably lower opening on Monday. Earlier in the global trading day, the Asian markets sold-off along with commodities and emerging market currencies. The Chinese market spearheaded the weakness, as the Shanghai Composite recorded its biggest loss since 2007. European stocks are also experiencing rout.
With very little economic catalysts to sway the domestic markets, selling could be the order of the day. Light sweet crude is trading at sub-40 level a barrel and commodities are all weaker. The dollar is weaker except against commodity currencies. The world's obsession with China and its global growth driving capability has proved the undoing of the markets, especially as the nation finds it difficult to sustain the staggering growth pace it has witnessed in the past.
At 6:15 am ET, the Dow futures are slumping 359 points, the S&P 500 futures are declining 39 points and the Nasdaq 100 futures are retreating 140.50 points.
US stocks tumbled in the week ended August 21st to multi-year lows, as Chinese growth worries and domestic rate concerns hurt all risky bets.
Even as the global markets reel on worries about the global economy, traders are likely to sift through a raft of economic data scheduled for the unfolding week. Notable among these are the Commerce Department's durable goods orders, personal income and spending and new home sales reports, all for July, weekly jobless claims data, the National Association of Realtors' pending home sales index for July, Markit's preliminary service sector PMI for August and the University of Michigan's consumer sentiment survey for August.
The 2-day annual Jackson Hole Symposium scheduled for Thursday and Friday may also showcase the views of central bank officials of major central banks. Some Fed speeches, the results of some regional manufacturing surveys, the results of June house price surveys of the Federal House Finance Agency and S&P/Case-Shiller, preliminary second quarter GDP report and the results of auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.
The Chicago Federal Reserve is scheduled to release the results of its nation activity survey for July at 8:30 am ET. Economists expect the national activity index to rise to 0.20 in July from 0.08 in June.
Atlanta Federal Reserve Bank President Dennis Lockhart is due to speak to the public pension forum in Berkley, California at 3:55 pm ET.
The Asian markets experienced a bloodbath, with China spearheading the plunge downward, as risk aversion gripped the markets. Investors scurried off risky bets from equities to commodities to risk currencies.
With the yen appreciating sharply, the Japanese market succumbed to the sell-off spearheaded by exporters. The Nikkei 225 average opened lower and moved roughly sideways. After a leg down, the index moved sideways yet again in the afternoon before ending 895.15 points or 4.61% at a 6-month low of 18,541. All but one of the index components retreated.
Australia's All Ordinaries languished below the unchanged line throughout the session before ending down 210.60 points or 4.03% at a 2-year low of 5,014. The market witnessed across the board sell-off, with energy and financial stocks leading the declines.
China's Shanghai Composite Index slumped 297.84 points or 8.49%, the biggest one-day loss since 2007, before ending at 3,210, the lowest since February 13th, 2015. The index is now in the red for the year. Hong Kong's Hang Seng Index ended at 21,252, down 1,158.05 points or 5.17%.
On the economic front, Japan's Cabinet Office released its revised report on economic activity, which showed that the leading economic indicators index for Japan rose less than initially estimated. The index was at 106.5 in June, down from the preliminary reading of 107.2, but was up from 106 in May. June's index was still the highest since March 2014.
European stocks opened notably lower and are mired in the red, as the markets in the region react to the global sell-off. There aren't any major domestic catalysts to impact market movement.