Global stock market slump intensifies, investors flee to safe havens | Wilnesh News

Investors turned to safe-haven assets on Monday as a global stock market sell-off intensified after weaker-than-expected U.S. jobs data at the end of last week.

The disappointing jobs report stoked concerns among investors that the Federal Reserve made a mistake by keeping interest rates unchanged last week and that the world’s largest economy is heading toward recession.

The stock sell-off was also fueled by volatility in some major earnings reports and a hawkish tone from the Bank of Japan, which led to speculation that the popular yen “carry trade” was collapsing in the short term. A “carry trade” occurs when an investor borrows money in a currency with a low interest rate, such as the Japanese yen, and reinvests the proceeds in a currency with a higher return rate.

Monday morning, Swiss franc USD/USD rose 1.2% to 0.847 Dollaror the highest level since January this year.

Likewise, U.S. Treasury yields extended their decline and hit one-year lows. At 2:41 a.m. ET, the 10-year Treasury yield fell more than 8 basis points to 3.7099%. The 2-year Treasury yield was last at 3.7315% after falling about 14 basis points. The yield on Japanese 10-year government bonds also fell to 0.204%.

Gold futures rose 0.38% to $2,479.2 an ounce.

This buying contrasts sharply with the selling on the stock market. U.S. stock index futures fell in early trading on Monday. As of 4 a.m. ET, the Dow Jones Industrial Average futures fell about 600 points, or about 1.5%. S&P 500 futures and Nasdaq 100 futures fell 2.8% and 4.9% respectively.

Japanese stocks confirmed overnight that Asia has entered a bear market. The Nikkei fell 12.4% to close at 31,458.42 points, its worst day since “Black Monday” in 1987. Decline.

In Europe, the regional Stoxx 600 index fell 2.34%, with all sectors and major regional exchanges reporting losses. Technology stocks fell 5% before recovering slightly to fall 2.8%. Mining stocks also fell 3.65%, and banking stocks fell 3.22%.

Ted Alexander, chief investment officer of BML Funds, said the current market volatility “has been going on for a long time” and was not a reason to panic.

“Everyone has been waiting for this for a long time and it would be great for active managers,” he told CNBC via email, adding that the shakeup could actually be possible if stocks offer better value. Will bring stock investors back.

“The stock market is not mature yet. Don’t give up on some investments in technology and growth,” Alexander said.

—CNBC’s Sarah Min and Lim Hui Jie contributed to this report