The Dow Jones took a mammoth beating on Wednesday, plunging as much as 550 points as investors endured a miserableADP nonfarm private sector employment report.
Tuesday’s ISM manufacturing reading had the stock market on edge, and today’s jobs numbers confirmed evident weakness in a previously strong US labor market.
Despite Donald Trump’simpeachment odds fallingandOctober rate -cut expectations rising, nervous retail investors dumped the Dow aggressively ahead of the more comprehensiveUS jobs reporton Friday.
Dow Jones Shakes as Data Betrays Weakening Job Market
Heading toward the closing bell , theDow Jones Industrial Averagehad lost 468. 88 points or 1. 76%. The DJIA last traded at 26, 104. 16 after dipping below 26, 000 earlier in the session.
The risk-off moves were evident on Wednesday, asmajor US stock indicesfell in unison. The S&P 500 and Nasdaq were also down more than 1.5%.
Commodity priceswere mixed, as a more substantial than expected rise incrude oil inventoriesfurther added togrowth concerns. US consumption was weaker than anticipated with a 3.1 million barrel build, more than double the 1.5 million expected. Gold and silver pricescontinued to move higheras investors sought refuge from stock market turmoil.
Confirming the move from risk, the Japanese yen soared against theUS dollar, which also weakened against the euro. USD / CNH continues to rise, as China ratchets up the pressure in thetrade warwith itsweaponized yuan.
Nordea Asset Management: China Woes & Retail Panic Crush Stock Market
While President Trump wasquick to blame the impeachment circusfor the weakness in US stocks, the odds of his ultimate removal from office remainvery low. Investors are worried about the economy, and they found no comfort in expectations of more easing from the Federal Reserve this month.
Sebastien Galy, senior macro strategist at Nordea Asset Management, provided CCN with the following assessment of the precarious state of the market.
“We expect the Dow Jones to drop by another 2.5% this week [from Tuesday’s close] as the market belatedly recognizes the very extensive nature of the Chinese slowdown, far beyond what official data states. It is impacting manufacturing industries but also eventually US consumers as the theme of a global slowdown impacts behavior. The reality is that the US economy is doing quite decently and it is time to change this tune before it does more damage. ”
Galy believes that the weakness in US stocks may come from retail investors losing their nerve at the dramatic weakness in the macro data . ********************************** “The conclusion is that retail investors are reducing risks overall from fixed income to equities as they are surprised by the intensity of the slowdown, something that surprises far less professional investors. Such a process typically has a persistence of a few days as only the most agile moved, triggering a rapid adjustment in prices. ”
Dow Stocks: Carnage in Every Sector
The (Dow) took a colossal hit on Wednesday, with 2% to 3% losses throughout the index.
Apple slumped 2 . 45%, bringing its impressive rally to a close. American Express, Chevron, and Walgreens all shed more than 3%.
J.P. Morgan and Goldman Sachs fell in sync with other financials, asTreasury yields tumbledwith surging bond markets.
Johnson and Johnson was an oasis of green, up 1.4% aftersettling opioid cases in Ohio for just $ 20 million.
Clickherefor a live Dow Jones Industrial Average chart.
GIPHY App Key not set. Please check settings