Rolling coverage of the latest economic and financial news, as US recession fears and unwinding yen ‘carry trade’ hits markets
Fears of further market turmoil deepen after US economic data spooked investorsAsian stock markets tumble after US data fans recession fears
August is often a weak month for the markets; liquidity is often lower, as investors in the northern hemisphere head off on holiday.
This means the recent worrying US economic data could have a greater impact.
Markets were on edge before Friday but a weak payrolls has really escalated a profound move across the globe.
However the reality is that although payrolls was disappointing it’s hard to know how disappointing given the distortions from Hurricane Beryl.
For the last decade plus the FOMO driven “stocks have risen because they are rising” mindset has been the biggest momentum driver in markets – an upside cattle-prod combining fervid speculation with the ongoing distortions of mispriced money, artificially low interest rates, QE and expensive govt bonds, the financialisation of businesses, in a market seduced by a stream of fantabulous new, new things and greater than normal unbounded greed.
Old bond dogs like me found ourselves increasingly lonely we warned market participants that low rates were not normal, and central banks weren’t there to bail out markets… If this is a crash, it will reinstall a modicum of common sense to markets…
