Monday's Market Recap - China's Evergrande Group Send Stocks Plunging On Fear Of Default.
- cashtonsaunders
- Sep 19, 2021
- 2 min read
What is The Premarket Telling Us?
Monday, September 20, 2021 7:00 AM.
US stock futures are broadly negative at this hour, indicating a deep selloff at the open. Dow futures down 540 points, Nasdaq futures down 152 points, and S&P futures down 57 points. Asian markets were mixed in their session.
On The Bond Desk:
The US 10 Year Bond Yield at 1.331%, down 3.90 bps.
Currency Desk:
Eurodollar: 1.17
UK Pound: 1.36
Crude Oil:
WTI crude oil futures down at $70.54/barrel, down 1.99%.
On the Earnings Calendar:
None to report
In M&A News:
None to report
What About The Asian And European Markets?
Major Asian markets ended mixed overnight. Japan (Nikkei 225) gained 0.58%, Shanghai gained 0.19%, Hong Kong (Hang Seng) lost 3.30%
Major European markets ended with losses. German (DAX) lost 2.31%, France CAC 40 down 1.74%, London FTSE 100 down 0.86%.
Market And Sector Dynamic
Markets plunged at the open. The Dow lost 545 points, Nasdaq sank 296 points, and the S&P dived 73 points. WTI crude oil also got off to a lower start, down 1.57% to $70.84/barrel, and the US 10 Year Bond held at 1.319%, down 5 basis points. US and global investor are reacting to new out of China that Evergrande Group, a Chinese real estate development conglomerate could be near defaulting on it's over $300 billion debt, and the Government of China may not be inclined to intervene. Fear of potential contagion across the globe, including here in the US, sent investors voting with their feet.
Markets over the last few weeks have have appeared overbought, and tired, so this news could be the catalyst for the correction many have been anticipating. Investors were already concerned about issues here at home: The increasing number of hospitalizations, and deaths from Covid-19 among unvaccinated Americans remains a problem that the administration is attempting to address. Fiscal policy also played a roll in today market selloff, because of uncertainty in congress surrounding increasing the debt limit, and passage of the Biden administration's Build Back Better legislation. By and large, the main reason for today's selloff was the Evergrande Group's potential default and the contagion that it could cause, globally.
Stock attempted an early pulled back from low of the open in the first few minutes of trading, but that effort was short-lived, as the wave of selling continued as the session progressed. At the low of the day, around 3:15 PM., the Dow was down 965 points.
All eleven S&P sectors ended with losses today, led by Energy, Consumer Discretionary, Financials, Basic Materials, Technology, Communication Services, Industrials, Consumer Staples, Healthcare, Real Estate, and Utilities.
Factors Influencing Today's Market
China's Evergrande Group potential default off massive $300 Billion debt.
US 10 Year Bond Yield closed today at 1.311%, down 3.86%.
WTI crude oil closed at $70.56/barrel, down 1.34%.
Asian markets ended mixed in their session, while European market ended lower.
Market Close Volume Traded And Advance Decline Ratio
Markets went south today, in a broad based, deep selloff which sent the Dow down 614.41 points, Nasdaq dived 330.06 points, and the S&P sank 75.26 points. Total NYSE volume traded, a moderately light 4.94 billion shares. Declining shares outpaced Advancing shares by 5.26:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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