Financial markets crippled after China escalated the trade war with the United States, sending US equities to the largest fall of the year, sparking a rise in global bonds. Gold increased with the yen.
The S&P 500 index fell more than 3% and the loss in the Dow Jones Industrial Average went over 870 points. Apple and IBM fell 5%, and all but 10 S&P 500 names traded lower. The Cboe Volatility Index rose 33%. The 10-year yield was close to erasing the jump that followed President Donald Trump's election completely. China's yuan fell above $ 7 per dollar, a move that suggests the level is no longer a line in the sand for Beijing politicians. Oil falls.
Investors begin to grasp the potential for a protracted conflict between the world's two largest economies, with a recession indicator for the Treasury market hitting the highest alert since 2007. As demand for port companies spiked, gold made a run toward $ 1,500 an ounce, and it Japanese yen expanded the rally. Large cryptocurrencies, which were increasingly viewed as a haven in times of distress, climbed as Bitcoin approached $ 12,000.
"The trade war is intensifying now, and it is possible that a currency war will also start," said Chris Zaccarelli, Chief Investment Officer of the Independent Advisory Alliance. "Neither is good for the global economy, and both will hurt the stock markets."
Governor of the People's Bank of China, Yi Gang, said the nation will not use exchange rates as a tool in the escalating trade dispute with the United States, but for President Trump, the latest decline in the yuan is "called" currency manipulation " ; & # 39; The US leader also indicated that he wanted the Federal Reserve to act to thwart the Chinese action, with the swap showing that the central bank will ease by 100 basis points by December 2020, a quarter point more than was priced after last year
The trade war has been a steady catalyst for market volatility and hopes a solution is now sent even further into the horizon, according to Mike Loewengart, Vice President of Investment Strategy at E * Trade Financial Corp. Although it may continue to to challenge portfolios, investors should not make the mistake of trying to put time in the markets in the midst of selling off, he said.
"This too will eventually pass, and efforts by Volatility in recent months has shown that this can happen quickly, "Loewengart said.
These are some important events to watch out for this week:
Revenues from financial giants include: UniCredit, AIG, ABN Amro Bank, Standard Bank, Japan Post Bank.
Five Asian central banks have interest rate agreements including India, Australia and New Zealand.
A string of Fed policy makers speak this week, including St. Louis Chief James Bullard on Tuesday and Chicago's Charles Evans a day later. All are voters of the Federal Open Market Committee.
Here are the key features of the markets (all sizes and scopes are closing):
The S&P 500 index dipped 3.3% to 2,835.14 from 2:33 p.m. New York time duration.
The Stoxx Europe 600 Index fell 2.3%.
MSCI Asia Pacific Index drops 2.4%.
MSCI Emerging Market Index drops 3.3%.
Bloomberg Dollar Spot Index falls 0.1%.
The euro rose 0.9% to $ 1.1204.
The Japanese yen increased 0.6% to 105.97 per dollar.
The return on 10-year Treasuries fell 11 basis points to 1.73%.
Germany's 10-year return reduced two basis points to -0.52%.
The UK's 10-year return dipped four basis points to 0.512%.  COMMODITIES
Bloomberg Commodity Index decreased 0.6%.
Mid-crude oil in West Texas fell to $ 54.69 a barrel.
Gold increased 1.6% to $ 1,480.30 an ounce.