This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/live/2016/feb/09/market-turmoil-nikkei-plunges-european-stocks-germany-ftse-live

The article has changed 16 times. There is an RSS feed of changes available.

Version 12 Version 13
Market turmoil: Wall Street turns higher after FTSE 100 hits three-year low - business live Market turmoil: Wall Street turns higher after FTSE 100 hits three-year low - business live
(about 1 hour later)
9.35pm GMT
21:35
One late story breaking... Disney has just announced record quarterly earnings for the last three months.
The entertainment company made $1.73 per share, beating forecasts of $1.45 per share. And it attributed the success to the new Star Wars film, The Force Awakens.
Disney says:
Driven by the phenomenal success of Star Wars, we delivered the highest quarterly earnings in the history of our company.
Force Awakens boosted Disney's Q1 Studio Entertainment revenue by 46%, with profit up 86% #StarWars pic.twitter.com/GhwhYXcBrb
Updated
at 9.41pm GMT
9.17pm GMT
21:17
Wall Street finishes flat
It’s over.... And after a lively Shrove Tuesday, the Dow Jones industrial average has closed as flat as a pancake.
After falling 145 points, turning higher by 109 points, the Dow ends the day flat https://t.co/PYSu7t2FC4 pic.twitter.com/UoVgj8mfes
After being down 145 points, then up 100 points, the Dow finished down just 12 points. The S&P 500 was also unchanged, while the Nasdaq dropped by 0.36%.
Healthcare , materials, and biotech firms did well today, but energy stocks were kicked again, as concerns over global growth continue to mount.
And New York still remained nervous, given the widespread worries about the global economy.
As Steven Baffico, chief executive officer at Four Wood Capital Partners in New York, put it:
It’s difficult to find a lot of momentum to the upside for any sustained period of time.
8.11pm GMT8.11pm GMT
20:1120:11
The US stock market appears to be recovering its nerve....The US stock market appears to be recovering its nerve....
Market Alert » Dow soars to new session high, up 104 points after earlier dropping 145 https://t.co/zjsifXGfqC pic.twitter.com/KuEirmz4neMarket Alert » Dow soars to new session high, up 104 points after earlier dropping 145 https://t.co/zjsifXGfqC pic.twitter.com/KuEirmz4ne
8.05pm GMT8.05pm GMT
20:0520:05
With an hour to go until the closing bell, US retail giant Home Depot is leading the Dow Jones industrial average, by gaining 1.6%.With an hour to go until the closing bell, US retail giant Home Depot is leading the Dow Jones industrial average, by gaining 1.6%.
Famous names such as Nike, Visa, McDonald’s and Coca-Cola have also turned green, as Wall Street traders regain their nerve after a couple of wild sessions.Famous names such as Nike, Visa, McDonald’s and Coca-Cola have also turned green, as Wall Street traders regain their nerve after a couple of wild sessions.
But other companies are still sliding. Energy group Chevron is leading the Dow fallers, shedding 3.5%, mirroring the slump in the oil price today.But other companies are still sliding. Energy group Chevron is leading the Dow fallers, shedding 3.5%, mirroring the slump in the oil price today.
IT giant IBM are also down, reflecting losses across the tech sector.IT giant IBM are also down, reflecting losses across the tech sector.
Here’s the risers and fallers on the Dow, which is now up 46 points or 0.3%.Here’s the risers and fallers on the Dow, which is now up 46 points or 0.3%.
7.46pm GMT7.46pm GMT
19:4619:46
Remarkable scenes on Wall Street....the Dow Jones index is now up! Only by 17 points, or a meagre 0.1%, but it’s a start....Remarkable scenes on Wall Street....the Dow Jones index is now up! Only by 17 points, or a meagre 0.1%, but it’s a start....
7.45pm GMT7.45pm GMT
19:4519:45
Here’s our City editor, Jill Treanor, on the escalating concerns about the banking sector, which hit shares across Europe again today:Here’s our City editor, Jill Treanor, on the escalating concerns about the banking sector, which hit shares across Europe again today:
Growing anxiety about whether banks can withstand continued low interest rates and fears of a re-run of the 2008 financial crisis continued to stalk markets when shares fell to a three-year low and bank shares remained volatile.Growing anxiety about whether banks can withstand continued low interest rates and fears of a re-run of the 2008 financial crisis continued to stalk markets when shares fell to a three-year low and bank shares remained volatile.
As shares in Deutsche Bank plumbed new depths on Tuesday and the bank’s chief executive had to reassure its 100,000 staff that it was “rock solid”, concerns mounted about the health of the global banking sector.As shares in Deutsche Bank plumbed new depths on Tuesday and the bank’s chief executive had to reassure its 100,000 staff that it was “rock solid”, concerns mounted about the health of the global banking sector.
“Many are asking ‘crisis’ questions: ‘Is there risk of a financial crisis re-run’ and ‘can a large European bank face a liquidity event’?” said analysts at Goldman Sachs.“Many are asking ‘crisis’ questions: ‘Is there risk of a financial crisis re-run’ and ‘can a large European bank face a liquidity event’?” said analysts at Goldman Sachs.
The Goldman analysts reckon the alarm bells are ringing too loudly. They recognise that market confidence is “fast deteriorating” but point to the €800bn (£625bn) of capital that European banks have raised since the 2008 crisis as evidence that the fears are overdone – together with the fact that customers are continuing to make deposits and there are no signs of strain in the crucial money markets.The Goldman analysts reckon the alarm bells are ringing too loudly. They recognise that market confidence is “fast deteriorating” but point to the €800bn (£625bn) of capital that European banks have raised since the 2008 crisis as evidence that the fears are overdone – together with the fact that customers are continuing to make deposits and there are no signs of strain in the crucial money markets.
The collapse in confidence in the banking sector since the start of the year has been dramatic. Shares in Deutsche Bank have slumped by almost 40%, UniCredit of Italy is down more than 40% while Credit Suisse is down 37% . The Europe-wide Stoxx 600 banking index is down 27%.....The collapse in confidence in the banking sector since the start of the year has been dramatic. Shares in Deutsche Bank have slumped by almost 40%, UniCredit of Italy is down more than 40% while Credit Suisse is down 37% . The Europe-wide Stoxx 600 banking index is down 27%.....
And here’s the full story:And here’s the full story:
Shares dive as fears mount for health of global banking https://t.co/hDlf5FFWwEShares dive as fears mount for health of global banking https://t.co/hDlf5FFWwE
7.19pm GMT7.19pm GMT
19:1919:19
Another dose of turbulence on Wall Street is driving shares higher!Another dose of turbulence on Wall Street is driving shares higher!
The Dow is now down just 11 points, having been down more than 100 points earlier.The Dow is now down just 11 points, having been down more than 100 points earlier.
*S&P 500 CUTS DECLINE TO 0.1%, DOW AVERAGE LITTLE CHANGED*S&P 500 CUTS DECLINE TO 0.1%, DOW AVERAGE LITTLE CHANGED
6.53pm GMT6.53pm GMT
18:5318:53
Why everyone's worrying about CoCo debtWhy everyone's worrying about CoCo debt
The cloud of worry hovering over Deutsche Bank has sent investors, analysts and (especially) journalists dashing to swot up on a newish financial instrument, called CoCos.The cloud of worry hovering over Deutsche Bank has sent investors, analysts and (especially) journalists dashing to swot up on a newish financial instrument, called CoCos.
These contingent convertible bonds were introduced after the 2008 financial crisis, to give European banks an extra wall of protection. They’re been very popular, because they provide a better interest rate than many other bonds. BUT.... that’s because they could potentially be turned into shares, or even wiped out.These contingent convertible bonds were introduced after the 2008 financial crisis, to give European banks an extra wall of protection. They’re been very popular, because they provide a better interest rate than many other bonds. BUT.... that’s because they could potentially be turned into shares, or even wiped out.
Deutsche’s CoCos have been slumping in value recently, on fears that the bank will struggle to get enough cash to meet the repayments (last night, it insisted the April 2016 payment was safe).Deutsche’s CoCos have been slumping in value recently, on fears that the bank will struggle to get enough cash to meet the repayments (last night, it insisted the April 2016 payment was safe).
Want to know more? Great. Bloomberg has published a useful Q&A.Want to know more? Great. Bloomberg has published a useful Q&A.
Here’s a flavour:Here’s a flavour:
So how does it work?So how does it work?
CoCos typically allow a bank to stop interest payments when it runs into trouble, like when its capital ratios breach levels considered dangerous (that’s the “contingent” part). If the bank’s financial health deteriorates further, CoCos can force losses on bondholders. The bonds can lose their value entirely or change into common stock (that’s the “convertible” part).CoCos typically allow a bank to stop interest payments when it runs into trouble, like when its capital ratios breach levels considered dangerous (that’s the “contingent” part). If the bank’s financial health deteriorates further, CoCos can force losses on bondholders. The bonds can lose their value entirely or change into common stock (that’s the “convertible” part).
How do banks determine whether they can pay?How do banks determine whether they can pay?
This is where it gets really technical. To make optional payments such as dividends, bonuses and coupons on CoCos, banks must calculate their “available distributable items,” or ADIs. Deutsche Bank, which has to make the calculation based on its audited, unconsolidated accounts under German GAAP, has thinner coverage than other major banks, prompting the current volatility.This is where it gets really technical. To make optional payments such as dividends, bonuses and coupons on CoCos, banks must calculate their “available distributable items,” or ADIs. Deutsche Bank, which has to make the calculation based on its audited, unconsolidated accounts under German GAAP, has thinner coverage than other major banks, prompting the current volatility.
Why did regulators create CoCos?Why did regulators create CoCos?
During the financial crisis, taxpayers had to inject billions of dollars into failing banks, while investors in those lenders’ bonds were often fully repaid. Officials wanted to create ways to avoid this in the future.During the financial crisis, taxpayers had to inject billions of dollars into failing banks, while investors in those lenders’ bonds were often fully repaid. Officials wanted to create ways to avoid this in the future.
Here’s the full piece:Here’s the full piece:
How the Bank Debt That Everyone Is Talking About Works: Q&AHow the Bank Debt That Everyone Is Talking About Works: Q&A
6.36pm GMT6.36pm GMT
18:3618:36
It’s tough being a bank right now:It’s tough being a bank right now:
As bank shares slump @tomstevenson63, investment director @Fidelity_UK tells @IanKingSky low rates are squeezing lenders' marginsAs bank shares slump @tomstevenson63, investment director @Fidelity_UK tells @IanKingSky low rates are squeezing lenders' margins
.@patrickjenkins_ asst editor @FT says European banks are in the "eye of the storm" with Deutsche especially in focus.@patrickjenkins_ asst editor @FT says European banks are in the "eye of the storm" with Deutsche especially in focus
Chins up, though. It could be worse:Chins up, though. It could be worse:
Is it 2008 again? No, says @patrickjenkins_ - banks are now far more robustIs it 2008 again? No, says @patrickjenkins_ - banks are now far more robust
UpdatedUpdated
at 6.39pm GMTat 6.39pm GMT
6.34pm GMT6.34pm GMT
18:3418:34
Here’s that sudden slide in the Brent crude oil price, back down to $30.60/barrel.Here’s that sudden slide in the Brent crude oil price, back down to $30.60/barrel.
Not what #IPWeek attendees like to see: Brent #oil down nearly 7% to $30.6 a barrel. WTI down 4.5% to $28.4 -- #OPEC pic.twitter.com/rgB7CxFQu5Not what #IPWeek attendees like to see: Brent #oil down nearly 7% to $30.6 a barrel. WTI down 4.5% to $28.4 -- #OPEC pic.twitter.com/rgB7CxFQu5
That may alarm crude producers, as they gather in London for International Petroleum Week.That may alarm crude producers, as they gather in London for International Petroleum Week.
UpdatedUpdated
at 6.35pm GMTat 6.35pm GMT
6.14pm GMT6.14pm GMT
18:1418:14
And the oil slide is getting worse. Brent crude is now down 6% at $30.92 a barrel on reports that US stockpiles will show an increase in the latest weekly figures, adding to fears of lack of demand and a continuing supply glut.And the oil slide is getting worse. Brent crude is now down 6% at $30.92 a barrel on reports that US stockpiles will show an increase in the latest weekly figures, adding to fears of lack of demand and a continuing supply glut.
According to a Reuters survey, crude stockpiles are expected to have risen by 3.9m barrels last week. Meanwhile the Energy Information Administration said it had cut its forecasts for oil demand in 2016 by 110,000 barrels a day and by 260,000 barrels in 2017.According to a Reuters survey, crude stockpiles are expected to have risen by 3.9m barrels last week. Meanwhile the Energy Information Administration said it had cut its forecasts for oil demand in 2016 by 110,000 barrels a day and by 260,000 barrels in 2017.
That seems to have pushed Wall Street even lower, with the Dow Jones Industrial Average now down 136 points or 0.8%.That seems to have pushed Wall Street even lower, with the Dow Jones Industrial Average now down 136 points or 0.8%.
UpdatedUpdated
at 6.15pm GMTat 6.15pm GMT
5.32pm GMT5.32pm GMT
17:3217:32
Oil prices continue to fall, with Brent crude now down 3.8% at $31.63 a barrel and West Texas Intermediate - the US benchmark - down 2.2% at $29.01.Oil prices continue to fall, with Brent crude now down 3.8% at $31.63 a barrel and West Texas Intermediate - the US benchmark - down 2.2% at $29.01.
Earlier the International Energy Agency said the world will be stockpiling excess oil for most of 2016, and cut its forecast for demand this year, meaning the supply glut will continue for some while yet.Earlier the International Energy Agency said the world will be stockpiling excess oil for most of 2016, and cut its forecast for demand this year, meaning the supply glut will continue for some while yet.
UpdatedUpdated
at 5.56pm GMTat 5.56pm GMT
5.25pm GMT5.25pm GMT
17:2517:25
Global markets, as measured by the MSCI All-Country World Index, are close to a bear market, that is, 20% below their recent peak:Global markets, as measured by the MSCI All-Country World Index, are close to a bear market, that is, 20% below their recent peak:
Global stocks are now close to a bear market https://t.co/ITExnDf2bu pic.twitter.com/HMFRSPjaADGlobal stocks are now close to a bear market https://t.co/ITExnDf2bu pic.twitter.com/HMFRSPjaAD
In the same week, #CAC40 tumbles past the 4000 points mark, #Ibex beyond 8000 and #DAX below 9000. And it's only Tuesday.In the same week, #CAC40 tumbles past the 4000 points mark, #Ibex beyond 8000 and #DAX below 9000. And it's only Tuesday.
UpdatedUpdated
at 5.26pm GMTat 5.26pm GMT
5.16pm GMT5.16pm GMT
17:1617:16
European shares close lower but off their worst levelsEuropean shares close lower but off their worst levels
In yet another volatile day, European markets were firmly in the red once more as investors shied away from risk. With Japanese 10 year bond yields turning negative in another sign of the growing fear of a global recession, poor German industrial figures and a widening trade gap in the UK, there was no shortage of downbeat news.In yet another volatile day, European markets were firmly in the red once more as investors shied away from risk. With Japanese 10 year bond yields turning negative in another sign of the growing fear of a global recession, poor German industrial figures and a widening trade gap in the UK, there was no shortage of downbeat news.
Banks were in the firing line again on worries about their exposure to struggling sectors and the implications of negative interest rates, in particular Deutsche Bank despite its attempts to calm worries about the state of its business. The Stoxx Europe 600 banking index - which includes the likes of Deutsche Bank, Barclays, and HSBC lost another 3.97% and is now down more than 27% on the year.Banks were in the firing line again on worries about their exposure to struggling sectors and the implications of negative interest rates, in particular Deutsche Bank despite its attempts to calm worries about the state of its business. The Stoxx Europe 600 banking index - which includes the likes of Deutsche Bank, Barclays, and HSBC lost another 3.97% and is now down more than 27% on the year.
Wall Street is also in a turbulent mood, opening lower, recovering into positive territory after reasonable US jobs data and a rebound in technology stocks, before falling once more. The Dow Jones Industrial Average is currently arouind 70 points or 0.4% lower, but the US market performance did help pull European markets away from their worst levels.Wall Street is also in a turbulent mood, opening lower, recovering into positive territory after reasonable US jobs data and a rebound in technology stocks, before falling once more. The Dow Jones Industrial Average is currently arouind 70 points or 0.4% lower, but the US market performance did help pull European markets away from their worst levels.
So in Europe the final scores showed:So in Europe the final scores showed:
UpdatedUpdated
at 5.57pm GMTat 5.57pm GMT
4.38pm GMT4.38pm GMT
16:3816:38
Risk analyst and author of the bestseller The Black Swan, Nassim Nicholas Taleb on Deutsche Bank:Risk analyst and author of the bestseller The Black Swan, Nassim Nicholas Taleb on Deutsche Bank:
I had no concern over Deutsche B until the German Finance Minister stated we should have no concern over Deutsche B pic.twitter.com/w4YRC0fC8FI had no concern over Deutsche B until the German Finance Minister stated we should have no concern over Deutsche B pic.twitter.com/w4YRC0fC8F
UpdatedUpdated
at 4.48pm GMTat 4.48pm GMT
4.25pm GMT4.25pm GMT
16:2516:25
More on the latest jobs data from the US, ahead of Federal Reserve chair Janet Yellen testifying to Congress on Wednesday. Economist Harm Bandholz at UniCredit said:More on the latest jobs data from the US, ahead of Federal Reserve chair Janet Yellen testifying to Congress on Wednesday. Economist Harm Bandholz at UniCredit said:
Following Friday’s solid employment report, today’s JOLTS report was another display of strength: Job openings rose to 5.6m, the second highest since the beginning of the series in 2001, while the number of quits – i.e. voluntary separations by employees – rose to 3.1m, the highest since late 2006. The latter suggests a growing number of more profitable job opportunities for workers as the labor market is approaching full employment. This notion is consistent with the recent pick-up in average hourly earnings at the turn of the year.Following Friday’s solid employment report, today’s JOLTS report was another display of strength: Job openings rose to 5.6m, the second highest since the beginning of the series in 2001, while the number of quits – i.e. voluntary separations by employees – rose to 3.1m, the highest since late 2006. The latter suggests a growing number of more profitable job opportunities for workers as the labor market is approaching full employment. This notion is consistent with the recent pick-up in average hourly earnings at the turn of the year.
These underlying statistics, which usually get less attention that payroll gains or the unemployment rate, help to complete the assessment of the labor market situation. And chair Yellen is known to put particular emphasis on the JOLTS data. Accordingly, she should mention them tomorrow in the context of an improving labor market.These underlying statistics, which usually get less attention that payroll gains or the unemployment rate, help to complete the assessment of the labor market situation. And chair Yellen is known to put particular emphasis on the JOLTS data. Accordingly, she should mention them tomorrow in the context of an improving labor market.
Skeptics may argue that these numbers are backward looking, and that spillovers from tighter financial conditions or the energy slump will curb labor market dynamics in the months to come. This is certainly a risk, and one important reason, why the Fed is currently sitting back and wait. But why should this happen now, when it hasn’t over the past several months? After all, oil prices have started to fall in mid-2014, and most of the adjustment occurred in the first half of 2015. Investment in mining structures has plummeted by 51% in 2015, with more than half of the drop occurring in the first half of the year. Similarly, the rig count plunged by more than 70% since the peak in September 2014, with almost 80% of that drop before the middle of last year. Since then, more than half a year has passed without any negative spill-overs to other parts of economy. Quite the contrary: The employment situation has improved further and workers are now feeling it.Skeptics may argue that these numbers are backward looking, and that spillovers from tighter financial conditions or the energy slump will curb labor market dynamics in the months to come. This is certainly a risk, and one important reason, why the Fed is currently sitting back and wait. But why should this happen now, when it hasn’t over the past several months? After all, oil prices have started to fall in mid-2014, and most of the adjustment occurred in the first half of 2015. Investment in mining structures has plummeted by 51% in 2015, with more than half of the drop occurring in the first half of the year. Similarly, the rig count plunged by more than 70% since the peak in September 2014, with almost 80% of that drop before the middle of last year. Since then, more than half a year has passed without any negative spill-overs to other parts of economy. Quite the contrary: The employment situation has improved further and workers are now feeling it.
4.03pm GMT4.03pm GMT
16:0316:03
JP Morgan has worked out what it thinks are the exposure of European and US banks to the struggling oil and gas sector - and it amounts to $250bn:JP Morgan has worked out what it thinks are the exposure of European and US banks to the struggling oil and gas sector - and it amounts to $250bn:
Bank exposure to oil & gas sector $250B ($170B European, $80B US). But losses likely to be minimal, says JP Morgan pic.twitter.com/1HiX8K0WUaBank exposure to oil & gas sector $250B ($170B European, $80B US). But losses likely to be minimal, says JP Morgan pic.twitter.com/1HiX8K0WUa
3.48pm GMT3.48pm GMT
15:4815:48
The FTSE 100’s fall to three year lows is an overreaction, according to the Centre for Economics and Business Research.The FTSE 100’s fall to three year lows is an overreaction, according to the Centre for Economics and Business Research.
The research group said it had been warning about the weakness of the global economy for some time, and said in particular that the US Federal Reserve’s rate rise in December was premature. But the current market falls were overdone. Scott Corfe, director and head of macroeconomics at Cebr, said:The research group said it had been warning about the weakness of the global economy for some time, and said in particular that the US Federal Reserve’s rate rise in December was premature. But the current market falls were overdone. Scott Corfe, director and head of macroeconomics at Cebr, said:
Markets have somewhat belatedly woken up to the underlying state of economic reality. We will be in a world of sluggish growth, loose monetary policy and low commodity prices for some time.Markets have somewhat belatedly woken up to the underlying state of economic reality. We will be in a world of sluggish growth, loose monetary policy and low commodity prices for some time.
As usual with the markets, it is either feast or famine. Our best view of the current circumstances is that, despite all the risks, we should avoid another financial crisis. In particular, Chinese policymakers have sufficient fiscal and monetary ammunition to revitalise the world’s second largest economy. More quantitative easing in the Eurozone, and possibly the US, should also help.As usual with the markets, it is either feast or famine. Our best view of the current circumstances is that, despite all the risks, we should avoid another financial crisis. In particular, Chinese policymakers have sufficient fiscal and monetary ammunition to revitalise the world’s second largest economy. More quantitative easing in the Eurozone, and possibly the US, should also help.
So the most likely scenario is modest growth in the world economy this year. When the reality of this is understood and if there is further monetary relaxation, it is quite likely that the markets will turn. They tend to be a useful lagging indicator.So the most likely scenario is modest growth in the world economy this year. When the reality of this is understood and if there is further monetary relaxation, it is quite likely that the markets will turn. They tend to be a useful lagging indicator.
3.29pm GMT3.29pm GMT
15:2915:29
Here’s a quick snapshot of how top banks have performed since the start of the year (spoilers: badly), courtesy of David Buik of Panmure Gordon:Here’s a quick snapshot of how top banks have performed since the start of the year (spoilers: badly), courtesy of David Buik of Panmure Gordon:
3.25pm GMT3.25pm GMT
15:2515:25
US job openings rise in DecemberUS job openings rise in December
Some positive news on US jobs.Some positive news on US jobs.
The number of job openings increased to 5.6m in December, up from 5.43m in the previous months and compared to expectations of a dip to 5.41m.The number of job openings increased to 5.6m in December, up from 5.43m in the previous months and compared to expectations of a dip to 5.41m.
The quits rate - which the US Federal Reserve considers a sign of worker confidence in the jobs market - rose to 3.1m.The quits rate - which the US Federal Reserve considers a sign of worker confidence in the jobs market - rose to 3.1m.
Whoa. BIG jump in quits in December. +196K. #JOLTS pic.twitter.com/xkeTD6tUt5Whoa. BIG jump in quits in December. +196K. #JOLTS pic.twitter.com/xkeTD6tUt5
Those figures seemed to calm Wall Street for a moment, with the Dow Jones Industrial Average moving into positive territory before slipping back again.Those figures seemed to calm Wall Street for a moment, with the Dow Jones Industrial Average moving into positive territory before slipping back again.
UpdatedUpdated
at 4.25pm GMTat 4.25pm GMT
3.01pm GMT3.01pm GMT
15:0115:01
Here are the moves in the Dow Jones Industrial Average:Here are the moves in the Dow Jones Industrial Average:
2.41pm GMT2.41pm GMT
14:4114:41
Wall Street is stabilising a little, but the main indices are still down.Wall Street is stabilising a little, but the main indices are still down.