(New York) The New York Stock Exchange fell at the open on Monday, appearing to panic in the wake of stock market routs, as fears of a recession in the United States loom and the rallying yen disrupts investment flows.
The Dow Jones Industrial Average was down nearly 3%, the Nasdaq Index was down 5.50% and the S&P 500 was down 4% in early trading as bond yields sank.
“After Friday’s jobs report, recession risks have increased,” said Will Compernolle of FHN Financial, who is now betting on a deeper rate cut by the Federal Reserve of 0.75 percentage points by year-end and another full percentage point cut next year.
On the bond market, borrowing rates for government debt securities have fallen to their lowest level in over a year for ten-year rates.
“The summer lull is over! Stock markets are in turmoil and bond yields are plunging as fears of a US recession have grown,” Neil Shearing of Capital Economics also said.
Bitcoin is also sinking
Bitcoin sank on Monday, with the risk asset weighed down by investor risk aversion falling below $50,000 for the first time since February.
By 9:30 a.m. ET, bitcoin was down 13.49% at $51,161.50, shortly after plunging more than 16% to $49,212.74, a nearly six-month low.
“At the peak of the day, $300 billion was wiped off the cryptocurrency market cap,” says Simon Peters, an analyst at eToro.
“While bitcoin often follows its own path, the current scenario aligns it more closely with traditional market dynamics,” says Stephen Innes, analyst at SPI AM.
Bitcoin, an asset considered speculative, is in fact suffering first and foremost from risk aversion on the markets, like stocks on Monday.
Elsewhere
“There is chaos in the financial markets,” comments Stephen Innes.
In Tokyo, the Nikkei fell 12.4%, its worst point drop since the stock market crash of October 1987, the broader Topix index sank 12.23%, and Taiwan and Seoul fell more than 8%.
These indices have suffered in the wake of the monetary tightening of the Bank of Japan, after years of negative rates, which has the effect of precipitating the rise of the yen. However, this exchange rate movement is negative for Japanese exporting companies.
At around 7:35 a.m., the dollar fell 2.68% to 142.60 yen, and the euro fell 2.36% to 156.14 yen.
In Europe, Paris dropped 2.37%, London 2.60%, Frankfurt 2.92%, Amsterdam 3.48%, Milan 3.21%.
The technology sector in red
Highly valued technology stocks are faltering in the face of the macroeconomic environment and doubts about the sector’s growth prospects.
In electronic trading before the New York Stock Exchange opened, Nvidia fell nearly 10%, Tesla lost 8.52%, Alphabet 4.52%, Apple 6.55%, Amazon 5.35%, Meta 5.04% and Microsoft 3.86%.
In semiconductors, in Amsterdam, ASML dropped 4.07% and BE Semiconductors Industries 3.83%. In Paris, STMicroelectronics fell 5.73%.
Oil at its lowest level in 6 months
On the oil market, the health of the American and Chinese economies is raising fears of a drop in demand for black gold and weighing on prices. At around 7:30 a.m., the price of a barrel of North Sea Brent was down 1.55% at $75.62, shortly after hitting a low since early January. Its American equivalent, a barrel of West Texas Intermediate (WTI), was down 1.77% at $72.22, shortly after plummeting to a six-month low.