The selloff in equity markets accelerated in overseas trading overnight and continues this morning. Tokyo plunged 5.8%, while Seoul lost 3.6%, and both Sydney and Hong Kong lost 2.1%. European bourses are also red across the board with Frankfurt down 1.9% and London down 0.3%.
US index futures are getting hammered as well with morning declines of 1.2% to 2.2% adding to yesterday’s losses of 1.2% to 2.3% with the NASDAQ leading the way lower both times. Indications of investor fear have started to emerge with the VIX Volatility Index climbing back above 20 for the first time since October, Gold jumping 1.4%, Silver rallying 2.5%, and USDJPY dropping back under 150 indicating the Yen may be resuming its position as a haven for capital along with precious metals.
US nonfarm payrolls (114K vs street 175K, previous revised down to 179K from 206K) capped off a run of disappointing US employment data this week and sent indices into another tumble. Average hourly earnings (3.6% vs street 3.7% and previous 3.9%) showed inflation pressures easing a bit. US factory orders are due at 10:00 am EDT.
Growing concerns that the US may be sliding into a recession based on yesterday’s weak Manufacturing PMI and Construction Spending reports, and today’s payroll numbers continues to weigh on commodities. US Crude Oil is now down 2.2% from flat, while Copper gains have eroded from 1.0% to 0.4% in the last few minutes.
Once again, the market reaction to Big Tech* earnings from last night has been wildly different. Apple* is down 1.0% premarket, but Intel has plunged 24.8% premarket after EPS came in well below expectations. Amazon.com is down 10.0%, while Booking Holdings* is down 6.4%. This morning, it’s Big Oil’s turn where Exxon Mobil has beaten the street, Chevron disappointed. In Canada today, Imperial Oil* and Telus beat the street, while Magna and Enbridge missed.
*Shares of Imperial Oil, Apple and Booking Holdings are held in portfolios managed by SIA Wealth Management.