- World stocks tanked on Wednesday after a disappointing set of US payroll data fanned fears of a US recession.
- ADP payroll data showed private employers added 135,000 jobs in September, below the 140,000 expected by economists polled by Reuters.
- The bad news followed weak manufacturing reports this week, which showed factory activity slumped to a decade low in the US and a seven-year low in the eurozone last month.
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World stocks tanked on Wednesday after a disappointing set of US payroll data fanned fears of a US recession. The bad news followed a slump in US manufacturing activity to a decade low last month, pointing to a global slowdown and major fallout from the US-China trade war.
ADP payroll data showed private employers added 135,000 jobs in September, below the 140,000 expected by economists polled by Reuters. The organization also revised its August reading, slashing it from 195,000 to 157,000 jobs.
Meanwhile, the Institute for Supply Management recorded an unexpected 1.3-point decline in US factory activity to 47.8 last month, indicating a continued contraction. The report came on the back of a shocking set of IHS Markit data, which showed eurozone manufacturing activity slowed to almost a seven-year low in September.
“Investors have become anxious about the health of the global economy because yesterday’s reading came on the heels of unsatisfactory figures from Europe,” Naeem Aslam, chief market analyst at TF Global Markets UK, said in a morning note.
Donald Trump blamed Federal Reserve Chair Jay Powell for the slowdown. The president has repeatedly called for the central bank to cut interest rates more aggressively, in a bid to stimulate the economy and weaken the dollar.
“As I predicted, Jay Powell and the Federal Reserve have allowed the Dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected. Fed Rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!” he tweeted.
Traders had other things to worry about. Hong Kong police shot a teenage protester on Tuesday, fueling concerns that demonstrations in the region could escalate. UK Prime Minister Boris Johnson also unveiled his Brexit plan, which many see as the nation’s last attempt to strike an exit deal with the European Union.
Here’s the market roundup as of 9: 40 a.m. in New York:
US stocks have plunged with the Dow Jones Industrial Average and S&P 500 down 1%, and the Nasdaq down 1.1%.
European equities have slumped with Germany’s DAX down 1.8%, Britain’s FTSE 100 down 2.5%, and the Euro Stoxx 50 down 1.9%.
Asian indexes fell with the Shanghai Composite down 0.9%, Japan’s Nikkei down 0.5%, and Hong Kong’s Hang Seng down 0.2%.
Oil prices have dropped with West Texas Intermediate down 0.6% at about $53.30, and Brent crude down 0.9% at $58.30.