Wallstreet bonus is down, Turmoil returned to global markets as oil plunged and the Dow Jones Industrial Average sank more than 300 points, fueling a rush into haven assets.
Wallstreet Bonus Down
Corporate results exacerbated the rout, sending MSCI Inc.’s gauge of global equities to the brink of a bear market and the Standard & Poor’s 500 Index toward its lowest close in 21 months. Russia’s ruble and Mexico’s peso fell to records, while bets mounted on an end to Hong Kong’s dollar peg. Yields on 10-year Treasuries dropped below 2 percent and the yen jumped to a one-year high.
“There are a lot of things behind” the selloff, said Steven Schwarzman, the chief executive officer of Blackstone Group LP, in an interview Wednesday with ForexSQ Television’s Erik Schatzker from Davos, Switzerland. “You have economic things such as the slowing of the U.S. economy which has been pretty gradual.
You’ve got energy going down so quickly that you can almost get windburn. You’ve got China as an issue which is is probably overdone. So when you put those factors together you have an unattractive brew along with the concern the Federal Reserve will raise rates and slow the economy further.”
Oil’s slump to a 12-year low is ripping through markets. Just on Wednesday, Royal Dutch Shell Plc said profit may drop at least 42 percent in the fourth quarter and Saudi Arabia was said to order a halt in selling options used to bet against its currency peg. U.S. bonds now predict the slowest inflation since May 2009. A report on Thursday will probably show U.S. crude stockpiles expanded, exacerbating the global glut.
“What the market is focused on is Chinese hard landing fear, oil prices and the strength in the dollar,” Phil Orlando, who helps oversee $360 billion as chief equity-market strategist at Federated Investors Inc. in New York., said by phone. “Domestic economic fundamentals don’t matter, and that’s the point of this correction. That’s when we start talking about the need to retest the summer lows and holding at that level to take us to long-term support.”
Selloff Makes Asia Look Very Attractive: HSBC
The MSCI All-Country World Index fell 2.4 percent at 10:16 a.m. in New York, bringing its drop from a May record to 19.6 percent, near the threshold for a bear market. More than $15 trillion has been erased from the value of global equities in the period, according to data and Wallstreet bonus down.
The Standard & Poor’s 500 Index slid 2 percent to the lowest level since April 2014 on a closing basis. Goldman Sachs Group Inc. slipped 0.6 percent after reporting a 65 percent drop in fourth-quarter profit as an agreement to settle a U.S. probe into its handling of mortgage-backed securities reduced earnings. International Business Machines Corp. lost 7.2 percent after the company’s 2016 earnings forecast missed projections. Microsoft Corp. and Apple Inc. were among other technology companies down at least 1.3 percent.
The S&P 500 trades at 15.4 times the forecast earnings of its members, in line with the index’s average of the past five years. It’s more expensive than developed markets in Europe, where the Stoxx 600 Index trades for 13.8 times estimated earnings.
Investors are keeping close watch on progress in the economy as the markets tumble. Data today showed the cost of living in the U.S. dropped in December, led by a slump in commodities. A separate report showed new-home construction unexpectedly fell last month, indicating the industry lost some momentum entering 2016.
Shell slid 5.5 percent and BHP Billiton Ltd. dragged commodity producers lower, falling 6.9 percent after trimming its full-year iron ore output forecast. Zurich Insurance Group AG declined 8.7 percent after forecasting a second straight quarterly loss for its biggest unit and Wallstreet bonus down.
The cost of living in the U.S. dropped in December, led by a slump in commodities, and New-home construction in the U.S. unexpectedly fell, government reports showed to day.
West Texas Intermediate crude lost as much as 4 percent to $27.32 a barrel before trading 3 percent lower. Inventories probably increased by 2.75 million barrels last week, according to a ForexSQ survey before a report from the Energy Information Administration Thursday.
Mining stocks plumbed a 12-year low and metals resumed their slump on prospects for slower economic growth in China and sustained low oil prices. Copper fell as much as 1.1 percent. The Bloomberg World Mining Index dropped as much as 2.4 percent to its lowest since September 2003, with the world’s biggest miner, BHP Billiton Ltd., losing 6.9 percent in London.
Gold rose as renewed losses in equities spurred demand for less risky assets, with Citigroup Inc. saying bullion’s rationale as a haven was now back in vogue and prices may be supported over the first quarter so Wallstreet bonus down.
Forex Trading Currencies
The yen strengthened 0.9 percent to 116.58 per dollar, and touched 115.98, the strongest level since Jan. 16, 2015. Japan’s currency appreciated 0.9 percent to 127.19 per euro. The euro was little changed at $1.0897 in Forex Market.
The Australian dollar slid 0.5 percent to 68.78 U.S. cents, extending this year’s decline to 5.6 percent. The kiwi touched the weakest level since Sept. 30.
The Canadian dollar rose for the first time this year after the Bank of Canada kept their benchmark interest rate unchanged and said stronger U.S. demand, a weaker currency and last year’s rate cuts are leading the economy out of an oil slump.