(As of 7:10 am PST)
US
stocks slumped Monday, with the three major benchmarks on pace to wrap up one
of the worst trading months in years. Fears over China persisted throughout the
weekend as rumors swirled about that China’s central bank would begin backing
off its stock purchase program that has propped up Chinese stocks recently.
China’s Shanghai composite index continued its volatile trading pattern Monday,
finishing the day down 0.82%, wrapping up its worst monthly performance in
three years by tumbling 12.5% in August. As has been the trend recently, the
China trade kicked up the selling pressure in Europe early and has now led to a
disappointing US open. Also, adding to the risk-off scenario for US investors
today, is a lack of clarity around the Federal Reserve’s rate hike timeline.
This weekend’s annual summit in Jackson Hole, put on by the Kansas City Federal
Reserve Bank, produced little in the way of clarity or direction as to when the
central bank is set to raise interest rates. While many market participants now
lean towards a December rate hike, there is still thought that a September hike
could be in the cards, especially after comments from Vice Chairman Stanley
Fischer over the weekend seemed to indicate a tone that hinted toward the
latter. Economic data is light today with a report on Chicago business PMI
falling slightly in August. Oil prices are giving back some of last week’s
gains while gold is down slightly today. Interest rates are down as equity selling
is bidding up the price of treasuries.
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