(Bloomberg) – US stock futures futures fell further, with no sign of truce over the defeat that beat more than 3 trillion dollars from the market by the end of September.
S & P 500 index contracts plummeted by 1.9 percent from the close on Tuesday, before trading at 2.673, down 1.1 percent, starting at 8:30 in London. The pressure of sales at the start of the session was so intense that it forced CME Group to intermittently suspend trading, according to an exchange spokesperson. European equities declined in the open, adding a negative sentiment.
Concern for China-U.S. the commercial relationships deepened after the arrest of the Chief Financial Officer of Huawei Technologies Co., Wanzhou Meng, even if the traders were still disconcerted for the entity of the declines. Some have speculated that the closing on Wednesday for the cash markets and the abbreviated session in futures was a factor.
"Today is a bloodbath," says Naeem Aslam, chief market analyst at Think Markets U.K. in London. "The risk aversion business is back with revenge.The entire element of the commercial truce between the United States and China, which has promoted a certain optimism in the market, is under great threat after the end of the year. arrest of the CFO of the Chinese telecommunications company Huawei. "
The dive was the last thing investors needed, already shady after Tuesday's debacle and a forced break on Wednesday for a day of mourning for former President George H.W. Bush. The S & P 500 collapsed by 3.2% on Tuesday, its biggest post-mid-sales slippage, while the Dow Jones Industrial Average sank by nearly 800 points while a series of worries swept away the rally of activities at risk.
Some of the bricks in the wall of concern:
A segment of the US yield curve reversed for the first time in more than a decade, a phenomenon that occurred before the previous recessions. Worrying about what was actually agreed between US President Donald Trump and China's President Xi Jinping on trade and economic prospects: the Federal Report of the Beige Book of Reserve published Wednesday showed fading optimism on the growth prospects of US companies.
"One thing is added to the other – there is concern about the yield curve flattening, the policy direction," said Walter "Bucky" Hellwig, senior vice president of BB & T Wealth Management . "Coupled with this is concern for slowing growth, it seems that the concern for growth is not removed, and it is being built rather than receded."
Thursday's moves seem even worse if we take into account the rebound of Wednesday's shortened futures trading session. On Wednesday, the S & P 500 futures fell 2.5 percent from the levels, a non-settlement day.
The risk mood has accelerated in Asian equity markets, bonds and currencies. Among the worst equity performances was an indicator of Chinese stocks, headed for its biggest two-day decline since February. Treasury yields have plummeted to a low point since September and the yuan has started to decline again.
"The futures were awake during the night, but when I looked at it tonight – I said" Oh my god, "said Donald Selkin, chief market strategist at Newbridge Securities, in a telephone interview. "I was surprised by the light of the fact that yesterday evening and during the day today they were on their feet." Why suddenly did the optimism escape? "
The CME group said that near-uncovered volatility triggered more than 40 of what it calls "logical speed events", resulting in intermittent pauses in futures trading and stock index options. All markets have worked as planned throughout, according to the spokesperson.
For Bruce McCain, chief investment strategist at KeyBank, the big concern is whether there will be a plan to sell the market. "The fear is that there can not be a bottom for this weakness – because the US economy is weaker than we see now and because global growth is decelerating faster than we expected," he said.
A sharp decline in long-term Treasury rates and persistent business concerns are likely to "linger on the back of the operators' minds" as the route continues. "There are too many issues to worry about," added McCain.
– With the assistance of Matt Turner, Abhishek Vishnoi and Luke Kawa.
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