Monday , October 3 2022

Wall Street falls 2% with the "angry" market for a lack of commercial advertisements in China.



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The world's main stock indexes are losing land while the optimism after the Xi and Trump meeting collapses. In addition, the product curve is now being reversed soon.

The confusion once again feels in the market. And in a few days, the market went from being optimistic to "angry", according to US activists, who produced heavy losses on Wall Street in the absence of concrete announcements at the front of the commercial war.

At this time, the main stock market indexes of the United States are colorfully red. Although the Dow Jones industrial has lost 3.10% of its value, the optional S & P 500 and Nasdaq compound dropped 3.24% and 3.80% respectively.

Why turn after the boom? According to operators from New York, investors are "confusing" and "angry" after the rally, as they do not see concrete signs that China and the US are taking steps to give the best to the commercial war.

"On Sunday, we thought the two countries had improved to relieve their commercial tensions, but since then we did not hear anything from China or Xi Jinping, so the market is angry, because it is being over-run on Sunday night to something that could not be taken to a real decision, "explains Michael Antonelli, equity trader Robert W. Baird & Co.

From New York, the operator adds that instability is likely to continue in the next few days, given that the market needs "the United States and China to confirm exactly the steps they will follow to resolve their commercial tensions. "

Investment notice

Another fear that circles in the markets will be as close as the Treasury bond product in the United States to invest, which is considered anticipating the recession.

With the collapse of 13 base points the paper has experienced ten years over the last four days, the difference between the 10 year bond and the two-year bond is no longer but 11 foundation points, its lowest level since the sub-fast crisis.

Although the spread between the two debt papers has linked to zero, this phenomenon has expanded as investors seek asylum in ten year bonds, emphasizing the rate down.

"The drop-in product is the result of flying to safer assets, people buy Treasury to avoid stock market in the last two days," said Antonelli.

The reverse of the US sovereign paper curve – where short-term rates are more than long-term rates – is considered a good predictor in terms of recession, since all times the rebellion has been reversed in the last decades, recession followed about 18 months later.

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