Global markets are collapsing

Here we go again.

On Thursday, major global stock indexes were sharply lower, with US futures also deep in the red ahead of the market open.

Near 6:51 a.m. ET, Dow futures were down more than 300 points (2%), S&P 500 futures were down 37 points (2%), and Nasdaq futures were down 90 points (2%).

Investors were piling into gold, with futures up 3%, or a whopping $36.30 an ounce to as high as $1,231.50.

US treasuries were also getting a huge bid, pushing the yield on the benchmark 10-year note down 12 basis points to as low as 1.581%, a level it last touched in late 2012.

Later Thursday, Federal Reserve chair Janet Yellen will continue her semi-annual testimony in Congress. At her first appearance yesterday, Yellen noted that the Fed was closely watching developments in financial markets for possible downside risks to the economy. She did not rule out an interest-rate hike in March, but said the Fed was willing to slow down its rate increases if the economic data indicate that this would be appropriate.

In all, her outlook on the economy was more or less unchanged, while she told markets that the Fed has been watching all that’s happening in financial markets and may adjust its policy plans if the economic data don’t hold up.

Meanwhile, the Swedish National Bank cut its key interest rate further into negative territory overnight.

Crude oil futures were slipping, with West Texas Intermediate crude in New York down nearly 4% to as low as $26.32 per barrel.

And once again, banking stocks in Europe were taking a hit, with Societe Generale shares dropping 12% after it reported earnings that were below expectations. Deutsche Bank shares tumbled earlier this week as investors became concerned about its ability to meet its credit obligations.

More to come…

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