(Bloomberg) – The US stock index futures fell back and did not signal a rebound from the routine that has brought more than $ 3 trillion out of the market since the end of September.
S & P 500 index contracts plunged 1.9 percent from its closing session on Tuesday, before trading at 2,673, down 1.1 percent, from 8:30 am in London. The selling pressure at the beginning of the meeting was so great that the CME Group had to force-stop trading, according to a spokesman for the stock market. European stocks gave up at the opening and added to the negative sentiment.
Concern about China-USA. Trading relationships deepened after Huawei Technologies Co., Wanzhou Meng's Chief Financial Officer was arrested, although traders were still confused about the extent of the decline. Some speculated that the closing of the markets for cash markets on Wednesday and the shortened session on futures were a factor.
"It's a bloodbath today," said Naeem Aslam, Think Market UK's lead market analyst in London. "The trade in risk aversion has returned with a vengeance. The entire element of the US-China ceasefire, which provided some optimism on the market, is in great danger following the arrest of the Chief Financial Officer of Chinese telecommunications company Huawei.
The jump was the last thing investors needed, already after Tuesday's routine and a forced break on Wednesday for a day of mourning for former President George HW Jack. The S & P 500 fell 3.2 percent on Tuesday, its biggest downtrend since the selloff in mid-October, while the Dow Jones Industrial Average fell nearly 800 points as a series of concerns erased the rally in risk assets.
Some of the bricks in the wall of concern:
One segment of the US yield curve has reversed for the first time in more than a decade, a phenomenon that has occurred before previous recessions. About what was actually agreed between US President Donald Trump and the Chinese President Xi Jinping on trade and economic prospects: The Federal Reserve's Beige Book report released on Wednesday showed that the growth prospects of US companies are decreasing were optimistic.
"One adds to the other – there is concern over the flattening yield curve, the direction of the policy, said Walter" Bucky "Hellwig, senior vice president of BB & T Wealth Management. "Associated with this is the worry that growth will slow down. It does not seem like the growth theme is being eliminated and it is building up rather than going back.
Thursday's moves look even worse as the recovery in the shortened futures trading session on Wednesday is factored in. The S & P 500 futures plunged 2.5 percent on Wednesday, the day without clearing. [RiskaversionhasacceleratedonAsianstockmarketsbondsandcurrenciesTheworstperformersinequitieshavebeenChinesestockswhosetwo-daypricehasfallensincetheirinceptionFebruary:TreasuryyieldsplummetedtotheirlowestlevelsinceSeptemberandtheyuancontinuedthedecline
"The futures were overnight, but when I looked tonight, I said," Oh my God, "Donald Selkin, chief market strategist at Newbridge Securities, said in a telephone interview," I was surprised the fact that they got up last night and during the day, why was the optimism suddenly fleeting? "
The CME Group said that volatility was close to the open trigger more than 40 of what he called "Velocity Logic Events" events led to temporary trading disruptions in stock index futures and options. According to the spokesman, all markets were designed as planned.
For KeyBank's lead investment strategist Bruce McCain, the grave concern is whether or not there will be a bottom sale. "There is a fear that this weakness may not have bottom – because the US economy is weaker than we currently see and because global growth is slowing down faster than expected," he said.
Treasury interest rates and continuing trade concerns are likely "in the back of the dealers" as the routine continues. "There are too many issues to worry about," McCain added.
– With support from Matt Turner, Abhishek Vishnoi and Luke Kawa.
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