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With China’s economy already in the doldrums, renewed weakness in Europe and the U.S. is bad news for global growth. Central bank rate cuts, the latest of which came from the Bank of England on Thursday, may have to be deeper and faster than analysts and policymakers had bargained for.
The 10-year U.S. Treasury yield tumbled 13 basis points, its biggest one-day fall this year, and is now below 4.0%. Never mind the great rotation out of Mega Tech into small caps, investors seem to be rotating out of stocks and into the safety of U.S. Treasuries.
Apple, Amazon and Intel reported earnings after the U.S. close on Thursday and the early signs are investors were not impressed. Intel’s outlook, in particular, was bleak, and shares fell 15% in after-hours trading.
Key developments that could provide more direction to market on Friday:
South Korea inflation (July)
Australia producer price inflation (Q2)
U.S. non-farm payrolls (July)
