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US stocks plummeted!
closed on Tuesday, and the US stock market fell sharply across the board! The three major stock indexes all fell more than 3%.
Dow Jones fell about 800 points;
Nasdaq fell more than 283 points, falling behind the three integer marks of 7400, 7300 and 7200;
S&P 500 closed down 3.2%;
US small-cap stocks Russell 2000 index hit the largest single-day decline since November 2011.
Overall, the total market value of the US stock market fell from US$40.45 trillion the previous day (December 3) to US$39.21 trillion, with a total evaporation of US$1.25 trillion, equivalent to RMB 8.5 trillion.
Source丨1st Century Business Herald (ID: jjbd21) is integrated from securities firm China (quanshangcn; come true), interface news, Wall Street News, Oriental Fortune Network , Daily Economic News (nbdnews; Cai Ding)
US stocks suffered a plunge!
Dow Jones fell by 800 points, Nasdaq fell by nearly 4%
Image source / Tuchuang Creative
On Tuesday, the US stock market plummeted again!
As of the close of December 4th local time, the Dow Jones industrial average index closed down 799.36 points, fell 3.1% to 25027.07 points;
S&P 500 index closed down 90.31 points, fell 3.24% to 2700.06 points, , 2 The benchmark index fell below the 200-day moving average, triggering more sell-offs from algorithm funds;
Nasdaq composite index closed down 283.08 points, fell 3.80% to 7158.43 points;
, which tracks US small-cap stocks, the Russell 2000 index fell 4.4% to 1480.75, the largest single-day drop since November 2011.
According to statistics from Securities China, in the past 30 years, the Dow Jones Industrial Average has fallen by 500 points in total, with the top four points falling in 2018, namely February 5 (down 1175.21 points), February 8 (down 1032.89 points), October 10 (down 831.83 points), and December 4 (down 799.36 points). It is worth noting that the Dow Jones Industrial Average fell by more than 800 points during the trading session on the 4th, which is the fourth time in the history of the US stock market that it fell by more than 800 points. On the news front of
, the partial inversion of yields of US bonds has made investors worried about growth prospects. on Monday (December 3) New York at the end of , the 10-year U.S. Treasury yield fell 1.82 basis points to 2.9697%; the two-year U.S. Treasury yield rose 3.46 basis points to 2.8211%, and the difference with the 10-year U.S. Treasury yield narrowed by 5 basis points, the largest single-day increase since the end of March this year.
According to the Daily Economic News, the sharp narrowing of the two has also made the market feel uneasy as the inversion of the two-year and 10-year U.S. Treasury yields are seen as a signal of the US recession. It should be pointed out that the last two-year and ten-year U.S. Treasury yield inversion also occurred in 2007, before the financial crisis officially broke out.
Technology, finance, energy and other sectors fell
Large US technology stocks closed lower across the board:
Microsoft fell 3.18%;
Apple fell 4.4%;
Amazon fell 5.87%;
Netflix fell 5.16%;
Google fell 4.83%;
Facebook fell 2.24%.
US stocks and financial stocks fell across the board:
Bank of America fell 5.43%;
Morgan Stanley fell 5.04%;
Berkshire Hathaway fell 4.81%;
Wells Fargo fell 4.54%;
JPMorgan Chase fell 4.46%;
Citigroup 4.45%;
Goldman Sachs fell 3.82%.
9Energy stocks all closed lower:
ExxonMobil fell 2.2%;
Chevron fell 2.84%;
ConocoPhillips fell 3.17%;
Schlumberger fell 3.67%;
EOG energy fell 3.74%.
Most Chinese stocks closed down :
Alibaba fell 3.3%;
JD.com fell 2.54%;
Baidu fell 4.53%;
NIO fell 6.6%;
Pinduoduo fell 2.71%;
Bilibili fell 7.07%;
Huya fell 7.05%;
iQiyi fell 5.55%;
Qutoutiao rose 4.53% against the trend.
1 Global market shivered
Faced with the plummeting US stock market, the global stock market shivered. The three major European stock indexes fell across the board on the 4th, with the UK's FTSE 100 closing down 0.56%, the French CAC40 closing down 0.82%, and the German DAX closing down 1.14%.
Asia-Pacific stock market opened lower in the morning today, with the Nikkei 225 index opening 1.3%, the Tohoku index opening 1.4%, and the Seoul comprehensive index opening 1.3%.
Commodity Market:
WTI January crude oil futures closed up $0.30, or 0.57%, at $53.25 per barrel. Brent's February crude oil futures closed up $0.39, or 0.63%, at $62.08 per barrel.
Forex Market:
USD index fell 0.1% to 96.97.
Offshore RMB (CNH) against the US dollar was 6.8508 yuan at 05:59 Beijing time, up 261 points from the late New York trading on Monday.
bond market:
At the end of New York on December 4, the yield on the 10-year benchmark US Treasury bond fell by 5.61 basis points to 2.9135%, falling for four consecutive trading days.
At the end of the European market on December 4, Germany's 10-year benchmark treasury bond yield fell 4.3 basis points to 0.263%. European stocks fell to 0.261% before the closing, hitting a new low since May 29.
Pay attention to the five major negative points in the US stock market!
negative one:
How scary is the "inverted" US bond yield?
Market analysis believes that the "inverted" yield of US Treasury has become the main reason for the plunge in US stocks. The latest data shows that the two-year/10-year U.S. Treasury yield gap narrowed to 9.92 basis points, a new low since 2007.
Especially under the dual influence of the trade situation and changes in the prospects of the Federal Reserve's interest rate hike, the flatness of US Treasury yields once again hit a new high since the financial crisis. On December 3, the yield on three-year U.S. Treasury bonds once exceeded that of five-year U.S. Treasury bonds, which was the first time since 2007. The difference between the yield on two-year and ten-year U.S. Treasury bonds also narrowed to 13 basis points, the narrowest in the past 10 years.
Wall Street is concerned that when the U.S. Treasury yield curve reversal occurs, that is, short-term Treasury yield trading above long-term Treasury yields, a recession may follow, although it usually takes several years after the signal is triggered.
Still, many traders still believe that the reversal will not be formal until the 2-year yield is higher than the 10-year yield, and this has not happened yet.
On November 4, investors sold bank shares, and JPMorgan Chase, Citigroup and Bank of America all fell more than 4%. Citigroup and Morgan Stanley both hit 52-week lows.
B. Art Hogan, chief market strategist at Riley FBR, said, "As the trade friction concerns fade, our yield curve gradually fades, increasing market concerns."
According to historical experience, the inverted U.S. bond yields are the leading indicators for the US economic recession and stock market adjustments. Short-term bond yields are higher than long-term bonds, which means that confidence in long-term investment weakens and investors' expectations for future returns decline.
negative two:
Market is worried about the prospects of Sino-US trade negotiations
CICC Strategy says investors' concerns about the prospects of trade negotiations cannot be ignored.
The previous two days expect China to lower U.S. auto stocks, which rose sharply, both fell significantly, which also indicates that investors' concerns about the prospects for trade negotiations have increased again.
However, the spokesperson of the Ministry of Commerce once again sent a positive signal, "The meeting was successful, and we have confidence in implementation." The spokesperson of the Ministry of Commerce said that the economic and trade teams of both sides will actively promote the consultation work in accordance with a clear timetable and roadmap within 90 days. China will start with implementing the specific matters that have reached a consensus, the sooner the better.
negative three:
Federal officials Release of "hawkish" speech
Federal dynamics remain the focus of the market. Federal Reserve Chairman Powell's previous "dove" speech made the market breath a little.
It is worth noting that John Williams, the No. 3 person in the Federal Reserve and the Governor of the New York Fed, once again released a "hawkish" speech: The US economic situation is "in a truly good state." "In view of this prospect, I think that continuing gradual rate hikes will promote sustained economic expansion," he said. The testimony scheduled for Wednesday in Congress has been postponed and will be rescheduled later. Powell originally planned to discuss economic outlook with the group, but this Wednesday will serve as a national mourning day in memory of former President George Bush, and the New York Stock Exchange and Nasdaq markets will be closed. The U.S. Securities Industry and Financial Markets Association (Sifma) recommends that the bond market also close on Wednesday.
Powell's rescheduled testimony date has not been announced yet. However, the Fed still plans to release its Beige Book report on the economic prosperity of the Federal Reserve on Wednesday, which summarizes the business conditions of the Federal Reserve in 12 regions. This data is worth paying attention to.
As the three major U.S. stock indexes continue to decline, the "bear market is coming" of the U.S. stock market has gradually increased. The quantitative analysis team of Bank of America Merrill Lynch previously released a research report pointing out that 14 of the 19 bear market indicators have been triggered by Chinese and US stocks.
negative four:
technology stocks were reduced, Soros and Bridgewater sold
November 15, Soros Fund announced its third-quarter holding report this year, showing that Soros cleared Facebook and reduced its holdings in technology stocks such as Netflix and streaming music service platform Spotify.
On November 14, the third-quarter holding report released by Bridgewater, the world's largest hedge fund, showed that fund manager Rui Dalio also reduced his holdings in technology stocks such as Oracle.
In addition, the third-quarter holding report disclosed by Berkshire Hathaway, a subsidiary of Buffett , also showed that from July to September, Buffett only slightly increased his holdings of Apple's shares by 523,000 shares, far lower than the cumulative increase of 86.6 million shares in the previous two quarters.
The latest report released by Bank of America Merrill Lynch shows that stock long funds have withdrawn from cyclical sectors such as energy, technology, industrial products and materials, and invested in defensive sector stocks such as healthcare, daily necessities, and utility sectors, causing these defensive sector positions to quickly rebound to their highest level in the past two years.
negative five:
The bear market theory of the US stock market is gradually rising
US stock "big shorts", economist and writer Harry Dent recently wrote an article pointing out that the market may experience a sharp and deep collapse in the next few weeks.
The following figure shows that from February to September 2018, "smart money" has not been bought, and they may take the lead in selling, which will be an ominous sign and increase the possibility of a stock market plunging by about 40% in the future.
Note: The smart money buying index measures the situation when buying at the close (calculated smart money) compared to buying after the opening (stupid capital reaction).
Harry Dent pointed out that this is the most violent and severe crash in the metric. The index fell 20% before the tech stock crash in 2000; it fell 24% before and during the 2007-08 crash. The index has dropped by 38%, and it is a sharp drop! If this is the right measure of “smart money” sentiment, not only do they not buy before the rebound peaked in September, but they will continue to short on the decline and rebound. All of this is to remind you that the next two to three weeks is a dangerous time.
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