Asian stocks closed in the red with recessionary warnings front and center on Monday.
The selloff on Friday bled into Monday trading, but seemed to stop at Asia as US futures and European stocks are broadly flat. The worries followed a yield curve inversion last Friday, which signalled the bond market’s increasing concern about global growth and US recession.
Weaker industrial data out of Germany and dovish moves by the Federal Reserve last week had also dampened sentiment.
Investors saw the inversion of the three month to 10 year year US Treasury yield curve on Friday, the first since 2007, as a flashing light on global recession which prompted a broader run on equities.
“Global stocks have taken a battering in the last couple of sessions as bond yields have sunk across the board,” said Neil Wilson, chief market analyst at Markets.com. “The slide in yields last week was a red flag for equities; the bond market loudly proclaiming that it’s not confident about the growth outlook.”
Here’s the roundup as of 10.32 a.m. in London (6.32 a.m. in New York)
- The Shanghai Composite dropped 2% Monday while Japan’s Nikkei plunged 3% as the country’s economy struggles through global economic headwinds.
- In the US, futures are slightly in the red with the Nasdaq down 0.3% while the Dow and S&P 500 are both 0.1% lower.
- European markets are mixed, but broadly flat. The Euro Stoxx 50, France’s CAC and Germany’s DAX index are all little changed.
- US 10-year Treasury yields dived on Friday following the yield curve inversion but investors have fled equity markets for bonds Monday, with yields up 0.4%
- Oil, which had previously been boosted by OPEC+ cuts, slightly declined amid growth fears with Brent down 0.1% and WTI 0.4% lower.