Pre-market Update: Stocks in Freefall as Investor Fears Pile Up

Stocks are off to a bad start this week as investor fear focuses on three separate storylines.  The top story remains the rapid rise of US Treasury yields.  Global investors are pulling money out of stocks and moving to US Treasuries.

The second story pummeling stocks is the bitter trade dispute between the US and China.  Asian investors are particularly spooked by a potential in the global supply chains.  Moreover, this burgeoning trade war seems to have no end in sight.

Finally, the Eurozone is once again heading towards a potential crisis as investors lose confidence in the Italian government.  Italy’s newly elected anti-euro party has submitted a high budget deficit.  That’s roiling confidence in both Italy and the wider Eurozone.

Accordingly, Asian stocks started the day down for the most part.  Chinese stocks fell hardest after its week-long holiday.  A couple of the notable moves across Asia today:

  • Japan’s NIKKEI 500 Index moved down 0.66%;
  • The Shanghai Composite Index plunged 3.72%;
  • Hong Kong’s Hang Seng Index plummeted 1.39%;
  • South Korea’s KOSPI Index is down 0.60%;
  • India’s SENSEX gained 0.28%.

European stock markets are falling at the open today due to Italy.  A look at some of Europe’s top indices shows:

  • London’s FTSE Index is down 0.64%
  • The German DAX Index dropped 0.91%;
  • The FTSE Italia All Shares Index is tumbled 2.38%;
  • The French CAC 40 Index fell 0.92%  at the open.

European stock markets will continue to focus on issues within their own markets such as the Brexit negotiations and the Turkish Lira Crisis.  Additionally, European investors are keeping a close eye on developments in Italy as investors have become fearful of potential anti-EU measures by the new government.

US Futures Are Trading Lower in Pre-Market Action

The U.S. stock market is moving strongly lower in pre-market trading.   Indeed, the NASDAQ and the S&P 500 futures are down 0.38% and 0.29%, respectively.

Investors will continue to take their cues from the news cycle heading.  Accordingly, any new developments in the Trump legal morass or global trade disputes could see it drive markets in either direction.

See more of our analysis here.

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Al Basoglu

I am a financial services professional with over a decade of experience in various roles. I've lived and worked abroad in 5 different countries while pursuing personal and professional challenges. My interests include markets, history and different cultures. I tend to weave all of my interest into my analysis and articles.