Moscow, 5 Dec — “News. Economy” Euphoria in financial markets lasted two days, was replaced by panic. U.S. stock indexes plunged more than 3%.
In particular, high-tech Nasdaq lost 3.8%, the Dow Jones just over three, and the index of wide market S&P 500 fell by 3.25% percentage points. In the red zone was the vast majority of shares, and leaders of decrease have become tech giants. Amazon fell nearly 6%, Apple 4.5, capitalization of Google fell nearly 5%, Netflix lost more than 5%.
Thus, the offset was not only the rapid growth in the beginning of this week, caused by a trade truce United States and China, but growth late last week. Market participants shifted attention to other factors.
In particular the inversion of the yield curve of treasuries — an important harbinger of the crisis. Last time it happened was in 2007 — shortly before the collapse of Lehman Brothers. Powerful sales was also observed in the shares of banking sector. Systemically important global banks are trading a third below their annual highs.
The precipitous fall in yields on treasuries is the result of revaluation of market expectations. In addition, speculators are forced to close the open short positions, which only adds to the current movement.
The confidence of investors about rising interest rates has been shaken not only in the United States. Traders in the debt and money markets around the world are reconsidering the pace of tightening amid signs of a stalling global growth, writes Bloomberg.
Traders reduced bets on monetary tightening from the Federal reserve system in 2019 before dovish comments from Chairman Powell’s created an opportunity for a potential pause in the next year. The Protocol of the November meeting, the fed paved the way for more flexibility. At the same time, the long-awaited rate hike by the European Central Bank seems less likely, and the possibility of a similar move in Australia is constantly postponed.
Central banks can be good reasons to move in the direction of dovish policy. The international monetary Fund last month lowered its forecast for global growth and warned this week that the Outlook could get worse. This is reflected in the increased turbulence in the financial market: shares in the fourth quarter of decline and credit spreads widen. Meanwhile, falling oil prices holding back inflation expectations.
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