Markets are moving today with stocks tumbling 1% early in the U.S. trading session.
Global markets went into risk-off mode overnight following the release of disappointing flash manufacturing Purchasing Managers Index survey data, which suggested that Chinese manufacturing may unexpectedly contract this month.
“We expect more soft data prints ahead, as the impact of slowing credit growth seeps through to the real economy,” said Societe Generale’s China economist Wei Yao.
S&P 500 futures took an even sharper turn lower around 8:40 AM ET. Stocks have seen further selling since the 9:30 opening bell and the index is now down 0.9% on the day, trading at 1828.
The Dow Jones Industrial Average has broken through to its lowest level of the year today. Right now, it’s down 1.0%, trading around 16,210.
10-year U.S. Treasury futures and gold, meanwhile, are showing strength — up 0.5% and 2.0%, respectively (gold at $US1264 an ounce). The dollar is down sharply against both the euro and the yen.
The yield on the 10-year note is now 2.80%, the lowest it’s been in the year to date. Today’s price action has erased two days of moderate losses in the Treasury complex.
The charts below are, from left to right across the top, the S&P 500 index, the dollar-yen exchange rate, and the euro-dollar exchange rate. Across the bottom from left to right are gold, 10-year U.S. Treasury futures, and September 2016 eurodollar futures.
This morning we’ve had a number of economic data releases, including weekly jobless claims figures. The numbers, out at 8:30 AM ET, were better than expected, but they still gave a lift to gold and Treasuries.
The preliminary results of Markit’s January U.S. manufacturing PMI survey, out at 8:58 AM, were worse than expected — as was the FHFA’s November house price index, out at 9, and December existing home sales data, out at 10 — but most of the moves in markets happened before then.