10 things you need to know in markets today

Good morning! Here’s what you need to know in markets on Tuesday.

1. The Dow Jones had its biggest single day point drop ever on Monday as a bloodbath gripped the stock market. The Dow Jones Industrial Average dropping as much as 1,500 points. It closed trading 1,177 points lower. The index has now erased all gains for the year. Elsewhere, the S&P 500 closed down 4.08%, and the Nasdaq 100 down 3.77%.

2. Traders flocked to the safety of US Treasurys amid the selloff in stocks, with the 10-year yield down 12 basis points at 2.72%. Bond yields go down as demand, and therefore prices, go up. The benchmark yield hit 2.85% after Friday’s jobs report, its highest since January 2014.

3, The market’s drop was largely attributed to machine-based traders.“The trading floor was relatively quiet until the market took a further hit at 3 pm,” Vincent Kondaveeti, a financials sector sales specialist at Credit Suisse, said in a note. “It felt like the machines took over but we saw (human) investors buying the dip not only in financials but also other sectors.”

4. The stock market is finally getting a long-awaited bout of volatility.The Cboe Volatility Index – or VIX – spiked 84% on the day, its biggest single-day increase of all time, according to data going back to 1990. The VIX reflects expectations for volatility in the S&P 500, and trades inversely to the benchmark roughly 80% of the time.

5. The global stock bloodbath has nervous traders doing something not seen since the presidential election.For much of the stock market’s blistering bull market run, investors have stayed remarkably calm, with measures of fear locked near historical lows.

6. The market carnage extended into Asian trade, with Japan’s Nikkei taking a hammering on Tuesday. The Nikkei 225 index was down by around 4.7%, having fallen by as much as 6.7%. It marks a sharp correction for Japanese stocks, just a few days after trading at near all-time highs. The Nikkei has dipped by more than 10% from its recent high of 24,124 points reached on January 23 – indicating the market is now in a technical correction.

7. The bitcoin bear market has extended into new territory.The cryptocurrency, which gripped the attention of the markets when it soared to almost $US20,000 a coin, was trading below $US7,000 on Monday for the first time since November 15, according to data from CoinMarketCap.

8. China made major moves to eliminate all cryptocurrency trading. People’s Bank of China said it would block access to all domestic and foreign cryptocurrency exchanges and ICO websites.

9. Prime Minister Theresa May “categorically” ruled out staying in a customs union with the EU. May’s Brexit “war cabinet” will discuss the issue of Britain’s future relationship with the EU later this week.

10. Toyota Motor on Tuesday reported a 54% jump in operating profit for the third quarter, boosted by strong performance at home in Japan along with a weaker yen, and raised its forecast for full-year profit.Japan’s biggest-selling automaker posted 673.6 billion yen ($US6.19 billion) operating profit for October-December, from 438.59 billion yen a year earlier.

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