Stocks tumble as selloff deepens
The global equity rout extended on Tuesday as first Asian and then European markets tumbled, sending a gauge of world stocks toward the biggest three-day slide since 2015. U.S. futures bucked the trend, however, while Treasuries dropped and the dollar was steady.
The Stoxx Europe 600 Index slumped the most since June 2016, with every industry sector falling as much as 2 percent. Japan's Nikkei entered a correction as most of the shares on the 1,000-plus member MSCI Asia Pacific Index declined. Amid the sea of red, some safe-haven assets, including gold and European bonds, traded higher. Futures for both the S&P 500 and the Dow Jones started on the back foot but clawed their way into the green.
"How far it goes down? You tell me," Steven Wieting, global chief investment strategist at Citigroup Inc., said on Bloomberg TV. "But this speed of decline -you cannot keep doing this day after day after day without finding some sort of bottom rather quickly." Wieting said he anticipates that markets will stay volatile for a while.
Many finance professionals were left scratching their heads to explain the severity of the moves in a short space of time. Anxiety was building about the outlook for monetary policy prior to Monday's rout, with equities being tested by the surge in bond yields. Global shares had just last month risen to record highs on optimism for expanding profits and economic growth.
"I actually think there's buying opportunities, maybe not today, but through this week as this sell-off exacerbates," said Sean Fenton, a portfolio manager who oversees about A$1 billion ($788 million) at Tribeca Investment Partners in Sydney.
Elsewhere, oil slumped for a third day and metals joined the sell-off after gaining. Bitcoin tumbled for a sixth day to trade around $6,000.
Monetary policy decisions are due in Russia, India, Brazil, Poland, Romania, the U.K., New Zealand, Serbia, Peru and the Philippines. Earnings season continues with reports from General Motors, Walt Disney, SoftBank, Sanofi, Philip Morris, Total, Tesla, Rio Tinto, L'Oreal and Twitter. Dallas Fed President Robert Kaplan and New York Fed President William Dudley are among policy officials due to speak in Frankfurt and New York.
The Stoxx Europe 600 Index decreased 2.2 percent as of 8:25 a.m. London time, hitting the lowest in more than five months with its seventh consecu- tive decline and the largest dip in more than 19 months. Futures on the S&P 500 Index rose 0.8 percent, the biggest advance in more than a week.
The MSCI Asia Pacific Index sank 3.5 percent on the largest tumble in more than 19 months. The U.K.'s FTSE 100 Index dipped 2.2 percent, reaching the lowest in almost 10 months on its sixth consecutive decline and the biggest decrease in almost 10 months. The MSCI Emerging Market Index sank 3 percent to the lowest in five weeks on the largest tumble in more than 19 months.
The Bloomberg Dollar Spot Index fell 0.1 percent. The euro rose 0.5 percent to $1.2424. The British pound gained 0.1 percent to $1.3976. The Japanese yen dipped 0.1 percent to 109.20 per dollar. South Africa's rand jumped 0.4 percent to 12.0765 per dollar. The MSCI Emerging Markets Currency Index fell 0.1 percent.
The yield on 10-year Treasuries increased six basis points to 2.76 percent. Germany's 10-year yield decreased three basis points to 0.71 percent. Britain's 10year yield declined three basis points to 1.53 percent, the biggest drop in almost five weeks. West Texas Intermediate crude decreased 0.6 percent to $63.78 a barrel, the lowest in more than two weeks. Gold rose 0.1 percent to $1,341.34 an ounce.