The bulls bolted for the hills late last week as sharemarkets around the world fell the most since June on Friday.
Fears about a rate rise from the Fed, weak news from economies in Europe and the US over the week and a sharp sell off in bonds crunched European and US markets on Friday night.
That was after the Australian market fell on Thursday and Friday, sending the ASX 200 lower for the week, with a fall of 1.5% to come today after a 79 to 80 point slide in futures market trading on Friday night.
North Korea’s its fifth and largest nuclear test didn’t help confidence as markets in Asia adjusted to better than expected trade and inflation figures from China late last week (and the possibility of more to come tomorrow).
Eurozone shares fell 1.1% on Friday and the US S&P 500 lost 2.5% as bond yields rose further in response to Fed member warnings about waiting too long to raise interest rates.
These comments came on the back of the European Central Bank leaving monetary policy unchanged at its Thursday meeting.
Over the week, Japanese shares (up 0.2%) and Chinese shares (up 0.1%) saw small gains, the sharp rise in bond yields on Friday saw Eurozone shares drop 1% and US shares 2.4% lose for the week.
Australian bond yields helped drag down Australian shares by 0.6%. On Wall Street, the Dow Jones fell 394.46 points, or 2.13%, to 18,085.45, the S&P 500 lost 53.49 points, or 2.45%, to 2,127.81 and the Nasdaq dropped 133.58 points, or 2.54%, to 5,125.91.
It was the second-largest weekly drop for the Dow this year, and the largest for the S&P 500 since early February.
MSCI’s global stocks index dropped 2.1%, the most for any day since the aftermath of Britain’s decision to leave the European Union on June 23.
In Asia-Pacific shares outside Japan fell 1.4% after touching a 13-month high on Thursday!
Emerging market stocks fell 1.9%.
The S&P 500 fell 2.4% last week, the Dow dropped 2.2% in its worst week since January, while the Nasdaq slid 2.4%.
All three major Wall Street Indexes closed at their intra day low, pointing to another weak start tonight.