(As of 7:15 am PST)
September is not off to a good
start, with negative momentum persisting Tuesday on the heels of more
disappointing economic data out of China. After Monday’s close wrapped up the
worst trading month since May 2012 for the S&P500, hopes for a better start
Tuesday were quickly dashed as overnight developments in China sent Asian
benchmarks tumbling. A disappointing manufacturing PMI report in China showed
Chinese manufacturing activity contracting in August to its lowest level in
more than three years. The latest data further confirms the current growth concerns
China is facing which is leading to today’s broad-based selloff throughout
Asia, Europe and now the US open. In terms of economic news at home, data is
light today but not too uplifting. The ISM index for August fell to 51.1 from
52.7 in July, below consensus estimates and at its lowest level in two years,
indicating manufacturing activity on the home front is also slowing. A report
on construction spending beat expectations, but was not enough to turn the mood
on Wall Street as the major benchmarks continued to trade down 2% after the
report’s release. It looks like another volatile day for equity markets today,
with Europe set to lock in daily losses of more than 2%. Gold is providing the
safe-haven play with the precious metal trading up nearly $10 per oz., or
+0.84%. Oil prices are tumbling 4% today to $47 per barrel. Treasuries are up
as interest rates fell in what appears to be a risk-off day that we’ve been
used to seeing as of late.
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