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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/oct/15/stock-markets-losses-bounce-jitters-ftse-wall-street-saudi-asia-trade-rates-business-live
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Stock markets volatile amid fears over trade, oil and rates – business live | Stock markets volatile amid fears over trade, oil and rates – business live |
(35 minutes later) | |
Is volatility turning into the new normal? It’s certainly more common than it used to be.... | |
"If sudden market plunges out of nowhere seem to be happening more frequently than in the past, it’s not just you" https://t.co/F60a8TCSF9 pic.twitter.com/JFf2nNQLmM | |
Here’s a couple of photos from Wall Street today: | |
And here’s a photo from Riyadh, where the Tadawul All-Share Index (TASI) jumped by 3.5%, after heavy losses on Sunday | |
With one hour’s trading to go, Wall Street is edging higher. | With one hour’s trading to go, Wall Street is edging higher. |
The Dow is now up 0.5%, or 122 points, at 25,462, and on track for its second ‘up day’ in a row. | The Dow is now up 0.5%, or 122 points, at 25,462, and on track for its second ‘up day’ in a row. |
The numbers are in.... America’s budget deficit jumped by over $100bn in the last fiscal year, to nearly $780bn. | The numbers are in.... America’s budget deficit jumped by over $100bn in the last fiscal year, to nearly $780bn. |
Higher defence and social security spending helped to drive up the deficit, even though the economy grew strongly too. | Higher defence and social security spending helped to drive up the deficit, even though the economy grew strongly too. |
Marketwatch has the details: | Marketwatch has the details: |
The U.S. recorded a $779 billion deficit in the fiscal year ending Sept. 30, an increase of $113 billion, as spending climbed while revenue remained nearly flat, the Treasury Department announced Monday. | The U.S. recorded a $779 billion deficit in the fiscal year ending Sept. 30, an increase of $113 billion, as spending climbed while revenue remained nearly flat, the Treasury Department announced Monday. |
Outlays grew by $127 billion, or 3.2%, while government receipts rose 0.4%, or $14 billion. | Outlays grew by $127 billion, or 3.2%, while government receipts rose 0.4%, or $14 billion. |
Compared to GDP, the deficit rose to 3.9%, up by 0.4 percentage points. | Compared to GDP, the deficit rose to 3.9%, up by 0.4 percentage points. |
In September alone, the U.S. recorded a surplus of $119.1 billion. | In September alone, the U.S. recorded a surplus of $119.1 billion. |
UK defence firm BAE Systems saw its shares fall today, as traders pondered the implications of the Khashoggi case. | UK defence firm BAE Systems saw its shares fall today, as traders pondered the implications of the Khashoggi case. |
Earlier, Donald Trump told reporters that the Saudi king had firmly denied being responsible for the journalist’s disappearance - indeed, Trump suggested that rogue elements could be to blame (inside the Saudi consulate in Ankara?). | Earlier, Donald Trump told reporters that the Saudi king had firmly denied being responsible for the journalist’s disappearance - indeed, Trump suggested that rogue elements could be to blame (inside the Saudi consulate in Ankara?). |
Trump has now dispatched his Secretary of State, Mike Pompeo, to the Middle East to investigate. | Trump has now dispatched his Secretary of State, Mike Pompeo, to the Middle East to investigate. |
Fiona Cincotta of City Index says the Saudi tensions loomed over the City: | Fiona Cincotta of City Index says the Saudi tensions loomed over the City: |
Ironically, it was UK defence giant BAE Systems that bore the brunt of the dispute, trading down 3.46% on the day, as a conflict with the oil producing country could threaten its £10 billion deal for 48 Typhoon jets. | Ironically, it was UK defence giant BAE Systems that bore the brunt of the dispute, trading down 3.46% on the day, as a conflict with the oil producing country could threaten its £10 billion deal for 48 Typhoon jets. |
The oil market was surprisingly placid about rising political tensions with Brent crude trading up 0.35% and WTI up 0.39%. Instead some investment went into gold and gold shares, notably Rangold and Anglo American. | The oil market was surprisingly placid about rising political tensions with Brent crude trading up 0.35% and WTI up 0.39%. Instead some investment went into gold and gold shares, notably Rangold and Anglo American. |
Germany’s stock market also had a better day, with the DAX gaining 90 points or 0.8%. | Germany’s stock market also had a better day, with the DAX gaining 90 points or 0.8%. |
France ended slightly lower, though. | France ended slightly lower, though. |
A day that started with blustery rain and deep puddles in the City of London has ended with a modest recovery. | A day that started with blustery rain and deep puddles in the City of London has ended with a modest recovery. |
The FTSE 100 has nudged its way back over the 7,000 point mark, gaining 33 points or 0.45% to finish at 7,029. | The FTSE 100 has nudged its way back over the 7,000 point mark, gaining 33 points or 0.45% to finish at 7,029. |
This means the Footsie has avoided setting another six-month closing low, as looked possible this morning. | This means the Footsie has avoided setting another six-month closing low, as looked possible this morning. |
Wall Street is attempting to push higher, and add to Friday’s recovery. | Wall Street is attempting to push higher, and add to Friday’s recovery. |
The Dow is now up 84 points, or 0.3%, while the Nasdaq is coming off its lows. | The Dow is now up 84 points, or 0.3%, while the Nasdaq is coming off its lows. |
Last week’s market sell-off was partly due to worries that the global economy is slowing. | Last week’s market sell-off was partly due to worries that the global economy is slowing. |
And Capital Economics has added to those concerns, by predicting that the next recession could be closer than previously thought. | And Capital Economics has added to those concerns, by predicting that the next recession could be closer than previously thought. |
Neil Shearing, their chief economist, believes it will be triggered in America, as the Federal Reserve raises rates to calm inflation (as Donald Trump has warned). | Neil Shearing, their chief economist, believes it will be triggered in America, as the Federal Reserve raises rates to calm inflation (as Donald Trump has warned). |
Shearing writes: | Shearing writes: |
The next global downturn is likely to come much sooner than the current consensus anticipates – indeed, we think that world GDP growth is already peaking in this cycle and that it will slow relatively sharply in 2019-20. | The next global downturn is likely to come much sooner than the current consensus anticipates – indeed, we think that world GDP growth is already peaking in this cycle and that it will slow relatively sharply in 2019-20. |
The downturn itself is likely to be led by the US, where higher interest rates will begin to weigh on rate-sensitive sectors of the economy, and China, which is undergoing a structural slowdown. | The downturn itself is likely to be led by the US, where higher interest rates will begin to weigh on rate-sensitive sectors of the economy, and China, which is undergoing a structural slowdown. |
And while we anticipate that the next global downturn will be relatively short and mild compared to previous cycles, there is a long and growing list of threats that mean there is a significant risk of a sharper adjustment. | And while we anticipate that the next global downturn will be relatively short and mild compared to previous cycles, there is a long and growing list of threats that mean there is a significant risk of a sharper adjustment. |
The newswires are reporting that Janet Yellen, the former chair of the US Federal Reserve, has criticised Donald Trump for his attacks on her predecessor, Jerome Powell. | The newswires are reporting that Janet Yellen, the former chair of the US Federal Reserve, has criticised Donald Trump for his attacks on her predecessor, Jerome Powell. |
Nick Timiraos of the Wall Street Journal has the details: | Nick Timiraos of the Wall Street Journal has the details: |
Yellen on Trump's attacks last week: "It is not a desirable thing for a president to comment so explicitly on monetary policy.... Obviously presidents can speak out if they choose to and give their opinion about policy. There’s no law against that. But I don’t think it’s wise." | Yellen on Trump's attacks last week: "It is not a desirable thing for a president to comment so explicitly on monetary policy.... Obviously presidents can speak out if they choose to and give their opinion about policy. There’s no law against that. But I don’t think it’s wise." |
Yellen: "I don’t believe that President Trump's comments will change what the Fed is doing." | Yellen: "I don’t believe that President Trump's comments will change what the Fed is doing." |
Yellen also cited the danger that the US economy is running too hot, and also cautioned that the US trade dispute with China could hurt the global economy. | Yellen also cited the danger that the US economy is running too hot, and also cautioned that the US trade dispute with China could hurt the global economy. |
Yellen: “I am worried about the economy overheating.” | Yellen: “I am worried about the economy overheating.” |
Yellen: 3% growth feels great but because I don’t think this is sustainable over the long run. Growth needs to slow. The Fed will need to be “skillful and lucky” to achieve a soft landing after 2019. | Yellen: 3% growth feels great but because I don’t think this is sustainable over the long run. Growth needs to slow. The Fed will need to be “skillful and lucky” to achieve a soft landing after 2019. |
Yellen: We are seeing a tight labor market, but firms have more market power than they used to and are resisting wage increases. Global competition and outsourcing means labor’s bargaining power is not enough to push this up at an aggressive pace. | Yellen: We are seeing a tight labor market, but firms have more market power than they used to and are resisting wage increases. Global competition and outsourcing means labor’s bargaining power is not enough to push this up at an aggressive pace. |
Yellen: "This is an economy that is more or less at full employment." She's running through all of the labor market data--quits, difficulty of hiring workers, household confidence surveys--that girds her thesis. "There's not a vast pool likely of labor out there." | Yellen: "This is an economy that is more or less at full employment." She's running through all of the labor market data--quits, difficulty of hiring workers, household confidence surveys--that girds her thesis. "There's not a vast pool likely of labor out there." |
Yellen: Trade is a concern. The trade dispute with China looks to be escalating and could become more intense. I don't know what the endgame is. Many countries, not just US, are concerned about China's demand for technology transfer and restrictions they put on foreign investment | Yellen: Trade is a concern. The trade dispute with China looks to be escalating and could become more intense. I don't know what the endgame is. Many countries, not just US, are concerned about China's demand for technology transfer and restrictions they put on foreign investment |
Yellen: For China, this is a negative and it is perhaps already showing up in their data. Many east Asian countries from Korea to Malaysia that supply Chinese goods could face repercussions. "It's a grave concern for those countries." | Yellen: For China, this is a negative and it is perhaps already showing up in their data. Many east Asian countries from Korea to Malaysia that supply Chinese goods could face repercussions. "It's a grave concern for those countries." |
Back in New York, the sell-off is gathering momentum. The Nasdaq tech index is now down 1%. | Back in New York, the sell-off is gathering momentum. The Nasdaq tech index is now down 1%. |