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- Global stocks are tumbling as fears of a US recession reached new highs on the back of consistent bond market warnings.
- US futures are dropping significantly in premarket trading after a brutal session in Asia Monday.
- European markets are following the slump as concerns about global growth batter investors.
Global stocks are in the red with recessionary warnings front and center on Monday.
US futures are pointing down after Asian equities plummeted following a yield curve inversion last Friday, which signalled the bond market’s increasing concern about global growth and US recession.
Weaker industrial data out of Germany and dovish moves by the Federal Reserve last week have also dampened sentiment.
Investors saw the inversion of the three month to 10 year year US Treasury yield curve on Friday, the first since 2007, as a flashing light on global recession which prompted a broader run on equities.
“European markets are taking their orders from the US selloff on Wall Street on Friday, with a sea of red across the board on Monday," according to Neil Wilson, chief market analyst at Markets.com.
Here’s the roundup:
- The Shanghai Composite dropped 2% Monday while Japan’s Nikkei plunged 3% as the country’s economy struggles through global economic headwinds.
- In the US, futures are in the red with the Nasdaq down 0.6% while the Dow and S&P 500 are both 0.3% lower respectively, as of 8.40 a.m in London (4.40 a.m ET).
- European markets are trading lower with France’s CAC down 0.4%. The UK’s Brexit woes continue with the FTSE also down 0.4% while the pound is down 0.2% against the dollar.
- US 10-year Treasury yields dived on Friday following the yield curve inversion but investors have fled equity markets for bonds Monday, with yields up 0.4%
- Oil, which had previously been boosted by OPEC+ cuts, declined amid growth fears with Brent down 0.3% and WTI 0.4% lower.
"Global stocks have taken a battering in the last couple of sessions as bond yields have sunk across the board. The slide in yields last week was a red flag for equities; the bond market loudly proclaiming that it’s not confident about the growth outlook," added Wilson.
See Also:
- Yet another recession warning just flashed red — a Treasury ‘yield curve’ just inverted for the first time since 2007
- A 28-year-old hedge fund star who took on Bill Ackman slammed a ‘bizarre’ ban on short selling a $14 billion German company
- US and China plan high-level trade talks amid fears tariff war could wipe $1 trillion off economy
Source: Business Insider – cburroughs@businessinsider.com (Callum Burroughs)