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| Dow plunges by 500 points as stock market sell off deepens - business live | |
| (35 minutes later) | |
| Half the Dow loss from 6 stocks: Goldman, Apple, Chevron, Boeing, Exxon and Caterpillar | |
| This could be the US stock market’s worst day since the aftermath of the Brexit vote.... | |
| Last 500 point drop for the Dow was on June 24, 2016 with Brexit — when Dow lost 610.32 points (-3.39%)@CNBC | |
| The selloff is gathering speed! | |
| The Dow Jones industrial average is now down by 500 points, or almost 2%. | |
| Oil giant Exxon is still the biggest faller, down 5.5%, followed by Chevron (-4.1%) and Apple (-3.4%). | |
| Investors seem to be increasingly spooked by the prospect of US interest rate rises, following today’s decent US jobs report - which showed a pick-up in hiring and wages. | |
| Kristina Hooper, chief global market strategist at Invesco, explains: | |
| A big wage growth number is the biggest risk to the stock market rally, because it means the Fed may get more aggressive in raising interest rates. | |
| Here are a few photos from Wall Street, as traders try to keep pace with today’s selloff: | |
| Here’s our colleague Richard Partington on the stock market losses today: | |
| Wall Street was heading for its worst week in two years on Friday as markets in Europe also continued to tumble from record-high levels reached less than a month ago. | |
| Investors headed for the exits amid growing fears over a bond market rout, triggered by early signs of inflation in the US as economic growth accelerates. US government bond yields, which rise as prices fall, hit the highest level since January 2014. | |
| The Dow Jones Industrial Average fell almost 400 points in early trading in New York, hitting a low of 25,787. Amid a widespread sell-off, the biggest fallers were Apple, Visa and oil firms Exxon and Chevron. | |
| In Europe, the FTSE 100 recorded its worst week since April last year when Theresa May called the snap election, dropping by 47 points to 7,443, while Germany’s Dax fell 1.7%. | |
| The worst week for stocks under Donald Trump comes after one of the best years in history for shares in 2017 and just a week after the Dow hit a record high of 26,617. | |
| More here: | |
| With two and a half hours trading to go, Wall Street is solidly in the red. | With two and a half hours trading to go, Wall Street is solidly in the red. |
| The Dow is down 1.5%, or almost 400 points, at 25,789 points. The wider S&P 500 is off 1.1%, while the Nasdaq has lost almost 1%. | The Dow is down 1.5%, or almost 400 points, at 25,789 points. The wider S&P 500 is off 1.1%, while the Nasdaq has lost almost 1%. |
| Given the losses earlier this week, Marketwatch agrees that we’re on track for the worst weekly losses in two years. | Given the losses earlier this week, Marketwatch agrees that we’re on track for the worst weekly losses in two years. |
| The markets in Mexico, Brazil and Canada are also having a bad day.... | The markets in Mexico, Brazil and Canada are also having a bad day.... |
| US wages may be growing, but so is inequality, says Dominic Rushe | US wages may be growing, but so is inequality, says Dominic Rushe |
| It’s been a long, slow recovery for US workers but wages finally appear to be growing again, according to the latest jobs report released on Friday. But behind the headline rate the figures show – once more – that inequality is on the rise. | It’s been a long, slow recovery for US workers but wages finally appear to be growing again, according to the latest jobs report released on Friday. But behind the headline rate the figures show – once more – that inequality is on the rise. |
| On Friday the labor department released its latest monthly jobs update. The US added 200,000 new positions in January, higher than expected, but the real surprise was in wage growth. Hourly earnings rose 0.3% in January, enough to lift the annual rate up to 2.9%. | On Friday the labor department released its latest monthly jobs update. The US added 200,000 new positions in January, higher than expected, but the real surprise was in wage growth. Hourly earnings rose 0.3% in January, enough to lift the annual rate up to 2.9%. |
| “This may be the start of a welcome trend in wage gains, and marks the highest percentage increase in average hourly earnings since 2009,” said US secretary of labour Alexander Acosta. | “This may be the start of a welcome trend in wage gains, and marks the highest percentage increase in average hourly earnings since 2009,” said US secretary of labour Alexander Acosta. |
| A tightening labour market and unemployment at 4.1% (a 17-year low) appears finally to be making its way into people’s pockets as employers are forced to raise wages in order to attract talent. | A tightening labour market and unemployment at 4.1% (a 17-year low) appears finally to be making its way into people’s pockets as employers are forced to raise wages in order to attract talent. |
| But the big numbers hide an ominous trend. For many Americans, slow wage growth isn’t just a hangover of the post-2008 “great recession”. For those without a college degree the sluggish rate of growth can be traced back to the 1970s, and the more recent slump deepened that inequality. | But the big numbers hide an ominous trend. For many Americans, slow wage growth isn’t just a hangover of the post-2008 “great recession”. For those without a college degree the sluggish rate of growth can be traced back to the 1970s, and the more recent slump deepened that inequality. |
| The full report is here: | The full report is here: |
| It was a bad day all round for global markets. The FTSE 100, as we mentioned earlier, has suffered its worst week since last April | It was a bad day all round for global markets. The FTSE 100, as we mentioned earlier, has suffered its worst week since last April |
| With poor results from Deutsche Bank to add to those of Daimler earlier this week, Germany’s Dax has also dropped sharply, recording its biggest weekly fall since February 2016. | With poor results from Deutsche Bank to add to those of Daimler earlier this week, Germany’s Dax has also dropped sharply, recording its biggest weekly fall since February 2016. |
| And Wall Street continues to come under the cosh, as the better than expected jobs and confidence numbers add to the belief that interest rises are on the way. Investors have begun to take seriously the fact that central banks are removing the financial punchbowl which has powered markets for the past few years, and perhaps at a faster pace than had been expected. The final scores in Europe showed: | And Wall Street continues to come under the cosh, as the better than expected jobs and confidence numbers add to the belief that interest rises are on the way. Investors have begun to take seriously the fact that central banks are removing the financial punchbowl which has powered markets for the past few years, and perhaps at a faster pace than had been expected. The final scores in Europe showed: |
| The FTSE 100 fell 46.96 points or 0.63% to 7443.43 | The FTSE 100 fell 46.96 points or 0.63% to 7443.43 |
| Germany’s Dax dropped 1.68% to 12,785.16 | Germany’s Dax dropped 1.68% to 12,785.16 |
| France’s Cac closed 1.64% lower at 5364.98 | France’s Cac closed 1.64% lower at 5364.98 |
| Italy’s FTSE MIB finished down 1.44% at 23,202.66 | Italy’s FTSE MIB finished down 1.44% at 23,202.66 |
| Spain’s Ibex ended 1.81% lower at 10,211.2 | Spain’s Ibex ended 1.81% lower at 10,211.2 |
| On Wall Street the Dow Jones Industrial Average is currently down 358 points or 1.37%. | On Wall Street the Dow Jones Industrial Average is currently down 358 points or 1.37%. |
| Wall Street’s slide continues. The Dow Jones Industrial Average is now down 384 points. | Wall Street’s slide continues. The Dow Jones Industrial Average is now down 384 points. |
| The FTSE 100 has closed down 0.63% at 7443.43, as part of the day’s global market sell 0ff. | The FTSE 100 has closed down 0.63% at 7443.43, as part of the day’s global market sell 0ff. |
| The UK’s leading index is down 2.9%, making it the worst weekly performance since 21 April last year when it lost....2.91%. | The UK’s leading index is down 2.9%, making it the worst weekly performance since 21 April last year when it lost....2.91%. |
| That incidentally was the week Theresa May decided to call a snap UK general election. Happy days. | That incidentally was the week Theresa May decided to call a snap UK general election. Happy days. |
| A quick summary of how bad it has been this week for US markets: | A quick summary of how bad it has been this week for US markets: |
| Wall Street on course for its worst week in 2 years: Dow -2.7% this week, S&P 500 -2.5%. Bond yields posting biggest weekly rise since US election in Nov 2016: 10y yield +18 bps (to a 4-year high of 2.85%), 30y yield +16 bps. | Wall Street on course for its worst week in 2 years: Dow -2.7% this week, S&P 500 -2.5%. Bond yields posting biggest weekly rise since US election in Nov 2016: 10y yield +18 bps (to a 4-year high of 2.85%), 30y yield +16 bps. |
| Back with bitcoin, and it has been through the classic rollercoaster ride today. | Back with bitcoin, and it has been through the classic rollercoaster ride today. |
| Having fallen as low as $7625 it is now actually in positive territory for the day, up 0.12% at $9010. | Having fallen as low as $7625 it is now actually in positive territory for the day, up 0.12% at $9010. |
| More on the disparities in the US wage growth data: | More on the disparities in the US wage growth data: |
| 🇺🇸Higher wage growth, yes... but for whom? Mainly supervisors (18% of private employment), not ordinary workers (82%) $EURUSD $USD #reflation pic.twitter.com/DkfeN233zw | 🇺🇸Higher wage growth, yes... but for whom? Mainly supervisors (18% of private employment), not ordinary workers (82%) $EURUSD $USD #reflation pic.twitter.com/DkfeN233zw |
| Connor Campbell, financial analyst at Spreadex, said” | Connor Campbell, financial analyst at Spreadex, said” |
| The US open made a miserable day all the worse for the European markets, while Bitcoin managed to pull back from the brink. | The US open made a miserable day all the worse for the European markets, while Bitcoin managed to pull back from the brink. |
| Following Wednesday’s hawkish hold from the Federal Reserve, there was arguably more interest in this non-farm Friday than there has been for a while. And, luckily for the ailing dollar, the numbers didn’t disappoint: the headline figure came in at 200k, far higher than both the 181k expected and the 160k posted in January, with wage growth also outperforming forecasts to remain unchanged at 0.3%. | Following Wednesday’s hawkish hold from the Federal Reserve, there was arguably more interest in this non-farm Friday than there has been for a while. And, luckily for the ailing dollar, the numbers didn’t disappoint: the headline figure came in at 200k, far higher than both the 181k expected and the 160k posted in January, with wage growth also outperforming forecasts to remain unchanged at 0.3%. |
| This, alongside a better than expected consumer sentiment reading from the University of Michigan, allowed the dollar to regain some ground lost this week. Against the pound the greenback rose 1%, sending cable back below $1.413, while against the euro the dollar jumped 0.7%, taking the currency away from yesterday’s $1.25-crossing 3 and a bit year peak. | This, alongside a better than expected consumer sentiment reading from the University of Michigan, allowed the dollar to regain some ground lost this week. Against the pound the greenback rose 1%, sending cable back below $1.413, while against the euro the dollar jumped 0.7%, taking the currency away from yesterday’s $1.25-crossing 3 and a bit year peak. |
| All this hawkishness was toxic for the Dow Jones, which plunged 300 points once the bell rang on Wall Street to hit 25900 for the first time in over a fortnight. This Dow drop only exacerbated the losses in Europe; the DAX and CAC both fell 1.3%, with the former on track for its worst close since September last year, while the FTSE slipped 0.7% to strike a sub-7450, near 8 week nadir. | All this hawkishness was toxic for the Dow Jones, which plunged 300 points once the bell rang on Wall Street to hit 25900 for the first time in over a fortnight. This Dow drop only exacerbated the losses in Europe; the DAX and CAC both fell 1.3%, with the former on track for its worst close since September last year, while the FTSE slipped 0.7% to strike a sub-7450, near 8 week nadir. |
| As for Bitcoin, while things are still bad, they are nowhere near as disastrous as they were at lunchtime. It had at one point found itself trading at $7750, a price not seen since the end of November, only for a wave of buyers to rescue it from those lows and send it back above $8650. Still, it’s certainly been a week to forget for the cryptocurrency, with a hat-trick of bad news – a shift in regulations in South Korea, a Facebook ban on ads for the product, and an investigation by the US CFTC – causing it to shed around $3000 per Bitcoin. | As for Bitcoin, while things are still bad, they are nowhere near as disastrous as they were at lunchtime. It had at one point found itself trading at $7750, a price not seen since the end of November, only for a wave of buyers to rescue it from those lows and send it back above $8650. Still, it’s certainly been a week to forget for the cryptocurrency, with a hat-trick of bad news – a shift in regulations in South Korea, a Facebook ban on ads for the product, and an investigation by the US CFTC – causing it to shed around $3000 per Bitcoin. |
| With the dollar recovering in the expectation of an imminent US interest rate rise, the pound has lost some of its recent gains. | With the dollar recovering in the expectation of an imminent US interest rate rise, the pound has lost some of its recent gains. |
| Sterling is down more than 1% on the day against the dollar to $1.4119, its biggest daily fall since November last year. | Sterling is down more than 1% on the day against the dollar to $1.4119, its biggest daily fall since November last year. |
| The university of Michigan’ survey may have come in better than expected but it did show the consumer sentiment index at its lowest level since September. However chief economist Richard Curtin was positive about the overall picture: | The university of Michigan’ survey may have come in better than expected but it did show the consumer sentiment index at its lowest level since September. However chief economist Richard Curtin was positive about the overall picture: |
| Consumer sentiment has remained largely unchanged for more than a year at very favorable levels. The January Sentiment figure was just 0.2 Index-points below December’s, and just 1.1 points below the 2017 average of 96.8--which was the highest yearly average since 2000. Stock price increases and the passage of tax reforms were mentioned by all-time record numbers of consumers. To be sure, there were small offsetting declines among lower income households and residents of the Northeast. | Consumer sentiment has remained largely unchanged for more than a year at very favorable levels. The January Sentiment figure was just 0.2 Index-points below December’s, and just 1.1 points below the 2017 average of 96.8--which was the highest yearly average since 2000. Stock price increases and the passage of tax reforms were mentioned by all-time record numbers of consumers. To be sure, there were small offsetting declines among lower income households and residents of the Northeast. |
| Consumers continued to expect growth in jobs and incomes, but anticipated a slightly higher inflation rate. Importantly, the motivating force behind purchase decisions has shifted from discounts on prices and interest rates to increased confidence in future job security and growth in wages as well as financial assets. This renewed sense of confidence was responsible for the recent declines in savings rates. | Consumers continued to expect growth in jobs and incomes, but anticipated a slightly higher inflation rate. Importantly, the motivating force behind purchase decisions has shifted from discounts on prices and interest rates to increased confidence in future job security and growth in wages as well as financial assets. This renewed sense of confidence was responsible for the recent declines in savings rates. |
| he tax cuts will increase discretionary spending once higher energy bills due to the unusually cold weather are paid. Monetary policy will need to tighten in the year ahead, but given consumers’ decade long experience with record low interest rates, only modest increases in interest rates will be sufficient to curb any excesses. Overall, the data signal an expected gain of 2.8% in real personal consumption expenditures during 2018. | he tax cuts will increase discretionary spending once higher energy bills due to the unusually cold weather are paid. Monetary policy will need to tighten in the year ahead, but given consumers’ decade long experience with record low interest rates, only modest increases in interest rates will be sufficient to curb any excesses. Overall, the data signal an expected gain of 2.8% in real personal consumption expenditures during 2018. |