(As of 7:20 am PST)
US stock indexes are lower to
start the trading week with pressure coming from a global selloff in equities
that began in China overnight. China’s Shanghai Composite index plummeted 8.5%
Monday – it’s worst one-day loss since February 2007 – as investors worried
that Chinese authorities are beginning to pullback on accommodative stimulus
measures aimed at supporting the market. Weak industrial data added to the
selling pressure in China, where the Shanghai index now stands 28% below its
multi-year closing high on June 12. Fears over Chinese volatility has spread to
Europe, with most of the major benchmarks down over 2%. At home, there is not
much data to distract US investors from the overnight Chinese developments. A
report on US durable goods orders showed orders increased 3.4% in June,
recovering from the previous month’s decline and in line with consensus
estimates. Despite the report, US stocks continued to fall with the Dow down triple digits, reaching its lowest level since February this year.
Commodity prices are mixed with oil falling to $47.50 per barrel, while gold added back $14/oz. to $1100 on a safe haven play. The US dollar is lower
against other major currencies while interest rates are falling as investors fled
to the safety of the US treasury.
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