Spreadex Market Update
Market sell-off continues, with Dow Jones set to enter correction territory for first time since 2011
In fact, £40 billion today alone has been lopped off the FTSE, with the UK index now only a 5% decline (a figure easily achievable this week given how nervy investors are at the moment) away from entering a bear market. Six and a half year lows for Brent Crude and WTI merely compounded a truly dismal day; all of a sudden the Greek-inspired volatility of June and July doesn’t look so bad in comparison.
Things are so bad on the markets at the moments that there is almost nothing interesting to say; the DAX and CAC followed the same pattern as the FTSE, seemingly happy to sit at 3% declines with the German index beating its UK counterpart to reach bear market status already.
And the worrying thing is it could all worsen this afternoon with the opening of the US markets. By and large last week saw the ringing of the bell on Wall Street hinder, not help, the markets, and with the Dow Jones entering correction territory for the first time since 2011 things don’t look like they will be any different this afternoon.
The US brings with it the only notable piece of (ostensibly) non-China-related news this evening, as Dennis Lockhart speaks to the 2015 Public Pension Funding Forum. Lockhart has been the most fervent beater of the FOMC’s hawk drum in the past month, stating that it would take a ‘significant deterioration’ in the US economy for him not to vote for a September lift-off. It will be interesting to see, then, if the $5 trillion disappearing act the markets are currently witnessing is enough reason for the Atlanta Fed President to want to kick the rate hike can a bit further down the road.
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