The morning’s troubles began before even a single exchange traded fund (ETF) could trade: losses in Asia and Europe combined with fears of a deep global recession led to the Dow Jones Industrial Average’s plunge 400 points at the opening.
Major indexes across Europe lost big: the Nikkei fell 9.6%; Germany’s DAX lost 8.3%; Britain’s FTSE fell 7.3%. Quarterly earnings and profit warnings were coming in across all industries, reports Carlo Piovano for the Associated Press.
Adding to the stress globally is the fact that many investors are pulling money out of emerging markets in areas such as Eastern Europe, Latin America and Asia on fears of vulnerability and that they might default on debt. Asian and European leaders are meeting to craft a plan to get out of this situation, reports Scott Tong for Marketplace. Asia’s leaders have agreed to create an $80 billion bailout fund, and the summit in Beijing will continue to focus on the world’s financial system.
Here’s a dash of “good” news: it could be a lot worse, and on the whole, the United States are faring better in October than most other global markets as of this morning. Floyd Norris for the New York Times took a major index from a number of countries and compared them.
The United States is down 26%. Canada is down 37%; Argentina is down 43%; Britain is down 31%; Switzerland is down 20%; Iceland is down 83%; South Africa is down 42%; Japan is down 23%; Australia is down 34%. Norris notes that with the exception of Iceland, the variance isn’t too great, but that the United States is better off than most.
In better news today, existing home sales in September rose by 5.5%, the largest jump in more than five years. But even with the gain in prices, the median sales price fell to $191,600, a loss of 9% from a year ago, reports Martin Crutsinger for the Associated Press. Any hope that housing could be nearing a bottom, though, could be tempered by this morning’s news that indicates we’re close to a recession.
OPEC announced it was cutting production in an emergency meeting today, but prices still slipped below $63 a barrel. Production quotas will be slashed by 1.5 million barrels a day starting next month, reports Louise Watt for the Associated Press.
United States Oil (USO) is down 25.3% year-to-date.