2024-08-08 06:00:41
Stock markets around the world plunged on Monday as investors feared that a slowing US job market could lead to a recession.
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“There is chaos in the financial markets,” he said. Stephen Innesanalyst of SPI AMand the “trigger” was the employment report in USA released on Friday, which showed a bigger-than-expected slowdown, with the unemployment rate in July at 4.3%.
The three main stock market indices Wall Street fell at the opening: the Nasdaq lost 3.10%, dragged down by the fall of the American technological giants, the S&P 500 lost 2.48% and the Dow Jones 2.11%.
European stock markets also ended Monday with sharp declines. Paris lost 1.42%, London 2.04%, Frankfurt 1.82%, Madrid 2.34% and Milan 2.27%.
In Asia, he Nikkei from the bag of Tokio closed losing 12.4%, the worst drop in points in its history.
Monetary tightening of the Bank of Japan and the rise of the yen added to fears of recession in the United States and caused the Japanese index to fall. Taiwanonny Seoul fell by more than 8%.
The US employment figures gave investors the impression that “the Federal Reserve may have delayed interest rate cuts for too long, risking triggering a recession,” he said. Mark Haefeleinvestment director of UBS Global Wealth.
To combat inflation, the Fed raised rates to their highest level in 20 years, between 5.25 and 5.50%, to force the US economy to slow down.
Until now, analysts had seen the US economy remaining strong, growing slightly and inflation slowing, a “soft landing” after the post-Covid period.
But markets now believe the US central bank will have to cut rates more sharply than planned to avoid a recession.
Expectations of a cut in the Fed were reflected in short-term rates on the bond market: the rate on two-year US bonds fell to 3.79% and the rate on ten-year bonds stood at 3.72%, compared with 3.79% at the close on Friday.
Oil was also penalized by fears of recession and the price of North Sea Brent lost 0.89% to $76.13.
Its US equivalent, West Texas Intermediate (WTI), fell 0.95% to $72.82 a barrel, shortly after falling to a six-month low.
The yen, meanwhile, rose sharply, taking advantage of its safe haven status amid fears of a US recession.
The Japanese currency appreciated by 2.74% against the dollar, to 142.62 yen per dollar, and by 2.10% against the euro, to 156.58 yen per euro.
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2024-08-08 06:00:41