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Stock markets slide again as global recession fears swirl - business live

Discussion in 'Market News' started by Lily, Feb 8, 2016.

  1. Lily

    Lily Forum Member

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    Rolling coverage of the day’s economic and financial news, as British bosses report growing anxiety over business prospects


    9.57am GMT

    More gloom! Economic sentiment among investors across the eurozone has fallen sharply this month, as the problems in the global economy hit Europe.

    Sentix, the Frankfurt-based think tank, has just reported that its index of investor morale has hit a 10-month low in February, dropping from 9.6 to 6.0.

    The euro zone proves it is not immune to the enormous loss of momentum in the global economy.

    The global economy is thus currently on the brink, led by a US economic downturn!

    #Eurozone | Feb Sentix Investor Confidence Expectation Survey: 1.5 v 6.3 pic.twitter.com/dEHOPh9TMx

    9.46am GMT

    Wall Street bank Citigroup has contributed to the sombre feeling in the markets, with a research note last week warning that we could face a ‘death spiral’.

    The bad news, according to Citi, is that the dollar could keep strengthening, driving commodity prices lower, hurting emerging markets (EM), and thus pushing the dollar higher etc etc.

    “The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.

    “Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)... and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”

    Recession or... 'death spiral'? Citi strategists think the latter https://t.co/a5It6IK4fn pic.twitter.com/bQRy0WCTSr

    This Citi thing is a crock. 'Oilmaggedon' is the tagline, but suggest you buy oil stocks for a bounce.

    9.24am GMT

    The Economist Intelligence Unit is also concerned about the economic situation.

    Their managing director, Robin Bew, tweets that they think UK interest rates will remain at 0.5% until 2019

    New survey shows #UK business confidence at 3 year low. We’re about to tweak our interest rate forecast - no rise for another 3 years

    9.19am GMT

    In another sign of unease, shares in UK chipmaker ARM Holdings have slipped by 4% to the bottom of the FTSE 100 leaderboard.

    8.54am GMT

    Peter Elston, chief investment officer at Seneca Investment Managers, argues that we’re unlikely to be entering a recession yet.

    Recessions generally start because central banks are trying to restrain economies, he told Bloomberg TV this morning. But right now, inflation pressures are very low, and economies are still some way from full capacity.

    “This would be an extremely unusual place for a global recession to start.”

    8.32am GMT

    Shares in engine maker Rolls Royce have shed 2% at the start of trading, as the City braces for further problems.

    The company has been hurt by cuts to defence spending by western governments, a fall in demand for corporate jets, and a slump in the oil price.

    Related: Rolls-Royce to cut dividend payouts

    8.24am GMT

    European stock markets have begun the new week rather gingerly.

    The FTSE 100 index has gained 20 points, or 0.4%, but Germany’s DAX is only up 0.1% and the French CAC is slightly lower.

    8.17am GMT

    This fall in UK business confidence will only fuel concern that the global economy is slowing.

    Chris Weston of financial spread-betting firm IG says this is the biggest issue in the markets today.

    Will we see a recession in the US and other developed nations? There is little doubt this is the number one question being asked right now.

    The strong fear is this stress – that is clearly being felt in the financial markets – will start to filter through to Main Street.

    8.02am GMT

    We have some worrying news to start the week -- confidence among UK executives has hit its lowest level since 2013.

    Concerns over Britain’s upcoming EU referendum are adding to worries over the global economy. And business leaders now fear their companies are suffering.

    “Global headwinds are finally hitting business confidence and the added uncertainty of EU referendum just round the corner is fuelling concerns.

    UK economy growing steadily but business confidence slips to a three year low is this morning's UK economic news

    The BDO measure of business confidence at 3 year low but its current output & employment measures rise; Lloyds Bank regional index also up.

    7.40am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    It looks like a quiet start to the week, as investors wait to hear from Federal Reserve chair Janet Yellen.

    “She may emphasize the positives in the U.S. economy, particularly the still-strong labor market.

    Looking ahead, she may sound more cautious, and she will likely highlight that the negatives are mostly from abroad and that they are watching the global picture closely.”

    Janet Yellen to Balance Confidence With Caution in Testimony https://t.co/j6cEjP4wOR via @business pic.twitter.com/6f2VoydmAZ

    Our European opening calls:$FTSE 5888 up 40
    $DAX 9327 up 41
    $CAC 4222 up 21$IBEX 8512 up 12$MIB 17315 up 64

    Continue reading...
     

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