Tuesday 25 August 2015

BLACK MONDAY- stock market collapse

Wall Street closes down 3.6%, worst plunge since 2011

© Lucas Jackson

RT,
24 August, 2015

US stocks closed with the Dow Jones Industrial Average down 588 points, recovering from the shocking plunge of 1,000 points at the opening bell on Monday. The S&P 500 was down over 77 points as the trading stopped on the busiest day of the year for investors.

Wall Street suffered one of the steepest falls in the last four years. The volatile session saw the main indexes plunge by 5 percent during the day before correcting and closing down nearly 4 percent. The Dow opened with a stomach-churning 1,000-point plunge following world market panic and the biggest Chinese stock slide since 2007.
What a strange day: Dow went on a roller coaster after a flash crash at the opening of >1000points. Closes 3.6% lower pic.twitter.com/GjOE0F7lhV
Holger Zschaepitz (@Schuldensuehner) August 24, 2015

More than 2,000 stocks hit new 52 week lows on Monday, according to the WSJ Market Data Group. Nasdaq saw Apple fall as low as $92. Giants such as Chevron, General Electric, Berkshire Hathaway and PepsiCo have seen their lowest stock prices on the New York Stock Exchange in a year.

The Dow’s 588 points loss corresponded to a 3.6 percent decline while the S&P 500’s 77 points drop corresponds to a 3.9 percent loss. The Nasdaq Composite ended the day with a 3.8 percent drop, down nearly 180 points.

According to preliminary data from BATS Global Markets, the US equities market operator, nearly 1,300 trading halts were recorded on US exchanges on Monday.
Though the Dow percentage change may not be dramatic, the 588 point drop is the eighth-biggest intraday point decline in the Dow’s history while the 1,000-point decline at the open is the largest intraday point decline in history.
*S&P 500 DROPS 3.9%, ENTERS CORRECTION FOR FIRST TIME SINCE '11
lemasabachthani (@lemasabachthani) August 24, 2015

The US stock chaos followed the crash of the world markets on Monday, after the Shanghai composite closed down 8.5 percent. Asian markets followed China with a broad sell-off. Europe mirrored the downtrend, with the STOXX Europe 600 Index dropping 5.3 percent – its worst percentage loss since 2008.


"The catalyst for recent declines in stock markets and commodity prices is a downbeat reassessment of the global economic situation due to China’s recent currency devaluation. The Chinese move to peg the Yuan lower caught markets by surprise and has caused many analysts to question whether China could meet its lofty economic growth forecasts,"Edward Harrison, banking and finance specialist at Global Macro Advisors, told RT

New Zealand

Black Monday fallout: NZX opens down 2.4pc




25 August, 2015




The New Zealand share market opened sharply weaker for the second day in a row as investors worldwide continued to offload their shares in the wake of extreme market volatility in the world's second biggest economy - China.
In the opening minutes of trade, the S&P/NZX 50 Index was at 5,473.5, down 134 points or 2.4 per cent.
On Monday, the index lost 143 points, or 2.49 per cent, to 5616, and about $2.25 billion was shaved off the market's total market capitalisation.
In the United States, the Dow Jones Industrial Average finished nearly 600 points down to its lowest closing point since February 2014. The index had dropped by just over 1,000 points in the first few minutes of trade.
The major British and European markets were down by 3 to 5 per cent, after the Shanghai Composite index dropped by 8.5 per cent as worries about a slowing Chinese economy took hold.
The New Zealand dollar slumped to its lowest level in six years as equities sank amid concerns about global growth.
Shane Solly, portfolio manager and research analyst at Harbour Asset Management, said another day of selling was likely for the local market.
"It was obviously another rough night on the markets globally," he said.
"We have seen a retracement on the back of changes in the Chinese economy," he said, adding there were rising concerns about global growth, as well as growth in China and in the other emerging markets.
"We have had a very strong run in the capital markets in the last three years and it's not a surprise to see it falling back, but we are going to see more volatility," he said.
Fund managers said that while the local market could expect to see more turbulence arising from volatility in offshore markets, the New Zealand economy was in better shape than many of its peers. Furthermore, the Reserve Bank had more leeway to cut official interest rates if there is a marked turn for the worse. The official cash rate stands at 3 per cent.
See this AP interactive on recent US sharemarket trends:


The kiwi touched 62.44 US cents overnight, its lowest level since July 2009, amid low liquidity, and was trading at 64.90 cents at 8am in Wellington, from 65.89 cents at 5pm yesterday.


Fund managers said that while the local market could expect to see more turbulence arising from volatility in offshore markets, the New Zealand economy was in better shape than many of its peers. Furthermore, the Reserve Bank had more leeway to cut official interest rates if there is a marked turn for the worse. The official cash rate stands at 3 per cent.
Four reasons the NZX wasn't hit as hard: 

• Much of the weakness overseas is related to oil and resources, which do not feature strongly on the NZX.
• The economy is generally in better shape than many of its peers.
• There are still levers to pull if the economy does worsen from here - such as lower interest rates and a lower exchange rate.
• The company reporting season has seen some solid results, which has helped to offset some of the weakness.


Australia

Wall Street crashes in sharp sell-off



More than $US5 trillion has been erased from the value of global equities since China unexpectedly devalued the yuan on August 11.
A wave of selling has gripped global markets overnight, setting up another bloodbath today in Australia.

US stocks joined selloffs in Europe and Asia, with the Standard & Poor's 500 Index tumbling toward its first correction in almost four years. Chinese shares sank the most since 2007 and stocks in Germany headed for a bear market.


Commodities fell to a 16-year low as crude plunged 4.1 per cent. The yen strengthened and 10-year Treasury yields slid below 2 per cent for the first time since April.

Markets Live: Horror night to hit ASX


The rollercoaster ride on share and bond markets took many investors by surprise, but it may be a sign of what lies ahead unless market fundamentals improve.
After one of the worst days on record shares look set to plunge again at the open after another torrid night of trading, ahead of BHP's annual earnings

And here's what you need2know:

  • SPI futures down 181 points to 4770
  • AUD at 71.32 US cents, 84.77 Japanese yen, 61.61 Euro cents and 45.35 British pence 
  • On Wall St, S&P 500 -3.9%, Dow -3.6%, Nasdaq -3.8%
  • In New York, JPMorgan -5.3%, Chevron -4.3%, Apple -2.5%
  • In Europe, Stoxx 50 -5.4%, FTSE -4.7%, CAC -5.4%, DAX -4.7%
  • In London, Glencore -13%, BHP -9.2%, Rio -6.9%
  • Spot gold down $US6.62 or 0.6% to $US1154.15 an ounce
  • Brent crude fell $US2.91 or 6.4% to $US42.55 a barrel
  • Iron ore slumped 5% to $US53.28 a dry ton

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