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Wall Street , this Christmas is a bit unhappy.
The US stock market just experienced the worst Christmas Eve ever! On the 24th, the Dow fell 2.91% to 21,792.2 points, a new low since nearly 16 months; the S&P 500 fell 2.71% to 2,351.1 points, a new low in 20 months; the Nasdaq fell 2.21% to 6,192.92 points, a new low since 17 months. On that day, the value of the U.S. stock market plummeted by about US$850 billion, corresponding to nearly 6 trillion yuan. If we look at the seven-day decline, the value of the U.S. stock market plummeted by more than 4.5 trillion U.S. dollars, corresponding to about 31 trillion yuan in RMB.
Among the three major U.S. stock indexes, the Nasdaq and S&P have both entered a "technical bear market," and the Dow is less than 1% away from entering a bear market. Trump once again angrily criticized the Federal Reserve as "the only problem with the economy." The U.S. Treasury Secretary urgently called the Federal Reserve, the U.S. Securities and Exchange Commission, and financial institutions to hold a closed-door meeting to discuss "whether financial institutions have sufficient liquidity." This situation makes people feel like they are back in 2008.
Affected by the heavy decline in U.S. stocks overnight, Japanese stocks plummeted at the beginning of the session today. The Nikkei 225 index 's decline quickly expanded to 4%, continuing to hit a new low since September 2017. The Nikkei 225 Index fell 20% from its October high and entered a bear market. In terms of A shares , the Shanghai Composite Index opened nearly 1% lower, the Shenzhen Component Index and the ChiNext Index both fell by more than 1%, and the major financial sectors fell across the board.
On Christmas Day on Tuesday, the European and American markets, the Korean stock market and the Hong Kong market are all closed.
Global markets plummeted, and safe-haven gold was sought after.
html On the 124th, WTI February crude oil futures closed down $3.06, or 6.71%, at $42.53/barrel, a new low since June 2017; Brent February crude oil futures closed down. US$3.35, a decrease of 6.22%, to US$50.47 per barrel, a new low since August 2017. Analysts pointed out that the sharp decline in crude oil futures prices also indicated that the market is worried about an economic recession in 2019.COMEX gold futures closed up 1.14% at $1,272.5 per ounce, a new high in half a year; COMEX silver futures closed up 0.9% at $14.835 per ounce. Stock markets fell sharply, and safe-haven gold gained popularity.
U.S. bond yields have plummeted, with the yields on 1-year and 2-year U.S. bonds inverting for the first time in 10 years.
Phil Flynn, senior analyst at Price Futures, said the market is worried about slowing economic growth, which will suppress demand for crude oil, and the stock market decline has exacerbated this concern. The U.S. government shutdown also added fuel to the fire, with investors selling crude oil and stocks and rushing into the safe-haven market to buy safe-haven assets such as gold and U.S. Treasuries.
On Monday, the French CAC40 index closed down 1.45% at 4626.39 points, and the British FTSE 100 index closed down 0.52% at 6685.99 points. Market trading was light, with many markets closed before Christmas or closing half a day early. European stock markets have fallen nearly 14% this year and are expected to be their worst year since 2008.
Before the end of the year, U.S. stocks often staged rebounds. However, as of the 24th, the S&P 500 index had fallen by 14.82% this month. The single-month decline in U.S. stocks this month was greater than the decline in any month in 2007 and 2008. U.S. retail stocks, which were hoping to turn around during the Christmas shopping season, have also suffered the biggest sell-off since the financial crisis. As of the 24th, the S&P Retail Index ETF-SPDR (XRT) had fallen by more than 17% in December and gave up all of its gains this year. It has fallen 14.9% since the beginning of the year.
The U.S. government shut down for the third time this year
The Treasury Secretary urgently called the Federal Reserve Securities Regulatory Commission to hold a meeting
Market analysts said that global investors’ concerns about the uncertainty of U.S. politics and the slowdown of the global economy have intensified in recent days, and many risk factors have exerted a combined influence. This ignited the market's risk aversion towards risky assets.
24 On the 24th, U.S. President Trump once again criticized the Federal Reserve on social media, saying that the Federal Reserve "has no sense of the market. The only problem with our economy is the Federal Reserve."
Under the successive blows of the stock market plunge and the government shutdown last week, U.S. Treasury Secretary Mnuchin issued a statement on his personal social account confirming that last Sunday he had called top leaders of the six major U.S. banks, including Goldman Sachs, JPMorgan Chase, and Wells Fargo, to inquire about market liquidity. issues in an effort to boost confidence in the U.S. financial system.
Mnuchin said that talks with the U.S. Financial Markets Working Group, which he chairs, will continue on Monday. The working group is commonly known as the "Plunge Protection Team" and met during the latter stages of the 2009 financial crisis. Its members include representatives from the Board of Governors of the Federal Reserve, the Securities and Futures Commission and the Commodity Futures Trading Commission.
This move obviously failed to convince the market, and was complained that there was no 300 taels of silver in this place. Some investors commented on Twitter that Mnuchin was trying to cause panic in the market.
Bloomberg quoted Nathan Thooft, head of global asset allocation at Manulife Asset Management, commenting on this: My first reaction is that this may not be a good sign. I used to think that the current situation was just a reflection of changes in investor positions before the end of the year, but now these things indicate that (the government) may be worried about something more serious and widespread.
Mayra Rodriguez Valladares, a former foreign exchange analyst at the New York Fed, also held the same view. A Bloomberg report quoted him as saying that Mnuchin was doing a disservice. It was strange for him to come forward to explain the views that Trump has always insisted on. This will only Increase market tension.
Recently, due to conflicts between the Democratic and Republican parties in the United States on some key issues, some U.S. federal government agencies have been shut down since December 22. This is also the third government shutdown since 2018. The first two were in 2018. January 20th and February 9th, lasting 3 days and 1 day respectively. For the first time in 40 years, the U.S. government shut down three times in one year.
Market analysts believe that the shutdown means that the two parties in the United States still have conflicts on some issues after the mid-term elections, and the Trump administration will still face challenges in promoting a series of policies in the future. The U.S. stock market has been plummeting recently due to such concerns.
In addition, the Federal Reserve recently raised interest rates for the fourth time this year, intensifying the conflict with President Trump. There is news that Trump intends to fire Federal Reserve Chairman Powell; US Secretary of Defense Mattis also recently said that he had an affair with Trump. The announcement of resignation due to differences in policy may trigger a new round of personnel turmoil in the Trump administration, exacerbating uncertainty in American politics.
In response to the decline of the U.S. stock market, many domestic institutions believe that A-shares are gradually breaking away from the "U.S. stock curse." At present, the main factors affecting the A-share market are still mainly concentrated internally. Although the external market may have a short-term psychological impact on A-shares There is a certain amount of pressure, but the overall impact is relatively limited.
Editor: Ren Xiao Song Zhaoqing
