Good morning, and welcome to our current coverage of the world economy, financial markets, euro area and business.
Global markets are utterly tense today, as investors are concerned about the prospects for global growth, the US-China trade war, Brexit and the Italian dispute with the EU over their budget plans.
Last night, Wall Street suffered one of the wildest days of the year. The Dow Jones Industrial Average dropped 551 points, or 2.2%, to 24,465 points, wiping out its gains for 2018.
Technology shares continued with their recent losses, with apple leaving almost 5%. But other sectors have also suffered with retailers Goal and Lowe's and disappointing investors with their latest results.
This followed the harsh day in Europe, which saw the German DAX hit a new 52-week minimum.
The fear of economic growth also disrupted oil prices on Tuesday, sending crude slipper over 6%.
The commercial paddock is that the market for long bulls may be frail.
Craig Earl of Oanda City Company says:
Another disturbing start to the week in financial markets is further clouding investors' feelings when we approach openly on Wednesday with futures at the moment stable but vulnerable to another suspension.
American technology reserves are once again leading the way, falling to the back of a combination of individual concerns – for example, Apple's iPhone sales – and generally poorer appetite for risk. FAANG stocks extraordinary performance in the first half of the year put them in front and center after the market turned, and some are now in the negative territory for 2018, while others are not far behind.
While many would say that the correction applies to the cards for some time, due to the increased list of risks for prospects, it would be an increase in US interest rates, the aggressive trade agenda of Trump, Brexit, Italy or one of many other heads, as bad what you get is difficult to say. We are already close to the October downturn and in the corrective territory, and even close to the market in some cases, such as DAX, if this is just a corrective step, I would expect investors to start taking some bargains soon.
It also comes today
There are many in the economic calendar, especially from America, when clearing the decks before Thanksgiving. The sale of new homes and orders for durable goods will give a picture of the strength of the US economy.
City traders will review the latest public finance data in the UK to see if the government's fiscal plans are on track. However, it will be overshadowed by a visit to Theresa May in Brussels, to discuss the Brexit agreement with Jean-Claude Juncker.
In the eurozone, the Commission is expected to confirm that the Italian budget from 2019 is not acceptable.
This paves the way for the EC to launch an excessive deficit procedure that could lead to the punishment of Italy (although it is a long process).
On the agenda:
- 9.30 am GMT: Public Finance in the UK for October
- 10 am GMT: The OECD announces its latest economic perspectives
- 13:30 GMT: US orders for durable goods and weekly numbers for unemployed people
- 3pm GMT: US home sales, Michigan mood survey
- 03:30 GMT: US Oil Data Inventory