Global Stocks Slump Amid Release of US Data

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Facts

  • Global stock markets tanked overnight Thursday into Friday following the release of a US manufacturing survey and jobs report — both of which fell below market estimates.[1][2]
  • According to a Thursday report from the Institute for Supply Management, US manufacturing — which makes up 10.3% of the economy — hit an eight-month low, with the Purchasing Managers' Index dipping to 46.8 from 48.5 in June. Any measure below 50 suggests a contraction in the market.[3][4]
  • Meanwhile, Friday's jobs report showed a slowdown in hiring in the economy and an unemployment rate of 4.3%, reportedly the highest in more than two years.[5][6]
  • End-of-day trading Thursday saw the Dow Jones Industrial Average lose over 494 points (1.2%), the S&P 500 decline 75.62 points (1.4%), and the Nasdaq dip 405.25 points (2.3%).[7]
  • Friday saw the second-largest drop in the history of Japan's Nikkei stock index, which reportedly fell over 2.2K points (5.81%) amid talk of more rate hikes in Japan.[8]
  • London's FTSE 100 was down 1.3% Friday, coming off the heels of the market's worst day in two years despite the Bank of England cutting rates for the first time since 2020.[9][10]

Sources: [1]The Telegraph, [2]Reuters (a), [3]Guardian, [4]Reuters (b), [5]CNN, [6]Bloomberg, [7]MarketWatch, [8]Kyodo News+, [9]Reuters (c) and [10]Verity.

Narratives

  • Narrative A, as provided by FT. Recent declines in the US stock market were an indication of a potential shift and the coming end of its boom. High interest rates have hurt debt-heavy companies and smaller businesses are facing declining revenues. Political and economic uncertainties do not create optimism. Most US stocks have not reflected the economy's once-exceptional economic growth for a while.
  • Narrative B, as provided by CNBC. A correction was only waiting to happen after the US market's bull run. Stock market crashes don't happen often, and the current situation doesn't suggest an imminent crash of a major kind. Investors should focus on maintaining diversification, balancing portfolios, and sticking to long-term plans, as history shows that market dips often present valuable buying opportunities.

Predictions