A volatile week across global stock markets has escalated into a heavy sell-off, with European stock markets plunging to their lowest level in 20 months on Thursday. In the UK, the FTSE 100 entered correction territory – falling 10% from its peak in May - after Wall Street suffered its biggest drop in eight months on Wednesday. Why are markets falling? The sell-off is being fuelled by mounting investor concern over rising US interest rates, which could curtail growth in the world’s biggest economy and have a damaging knock-on effect for global growth. The yield, or interest payment to investors, on two-year US government bonds hit the highest level since 2008, in a sign of the rising borrowing costs for companies and consumers. Donald Trump also raised eyebrows among investors by branding the US Federal Reserve “crazy” for planning further rate rises. The US economy is booming, propelled further by Trump’s tax cuts earlier this year, which has prompted the … [Read more...] about Why are stock markets falling and how far will they go?
Why trade stocks
Adam Shell USA TODAY Published 6:40 PM EDT Oct 10, 2018 It sure felt like a sell-everything day on Wall Street: Stock prices plunged, and talk of a panic and comeuppance for the nearly 10-year old bull market took hold. So why did stock prices fall so far, so fast, seemingly out of nowhere? And what explains the 832-point drop for the Dow Jones industrial average just a week after the blue-chip stock gauge notched a record high? While there's never a perfect answer to explain how market psychology can turn on a dime, here's how financial pros are making sense of the worst day for the Dow since February, and a big decline in popular technology stocks. What sparked the fall? Nervousness had been building for days on Wall Street. The catalyst was the recent spike in the yield on a closely watched government bond to a seven-year high. The 10-year Treasury note -- whose key rate impacts the pricing on things ranging from fixed-rate mortgages to stocks to virtually every financial … [Read more...] about Why did stock market drop so much today?
Investors’ patience with European stocks is wearing thin.This year was supposed to be the moment when European equities would finally catch up with the U.S. stock market, lifted by a revival in economic growth and corporate earnings while worries over the region’s populist leaders was set to fade. Instead, Europe has been the worst performer among developed countries in the first half of the year.Unnerved investors, including Schroders Plc, have pulled out of overweight positions on concerns spanning from Italy’s political crisis to the damage from a simmering trade war and the European Central Bank’s dithering on the interest rate outlook. The level of disenchantment has been so strong that the region’s stock valuations have tumbled to near 2016 levels, prompting a number of contrarian asset managers to start shopping for bargains.Here are five charts that look at key features of European stocks following their roller-coaster rise in the second … [Read more...] about Five Charts Show Why European Stocks Are Developed World’s Worst
It’s an open secret that Oliver Hemsley — one of the City’s most successful stockbrokers — is the favourite to buy a controlling stake in the Nex Exchange, the mini-stock market owned by Michael Spencer’s Nex Group, itself about to merge with the Chicago Mercantile Exchange. Hemsley wants the Nex equity cash market to use as a platform to create a small companies exchange to rival AIM, the London Stock Exchange’s junior market. It’s a great move — AIM needs competition as there is no earthly reason why the LSE should have a monopoly on raising capital for small companies, or indeed big companies. Yet Nex Exchange, which was formed by Spencer when Icap bought PLUS Markets six years ago, is a tiddler, having never achieved the scale that was hoped for. Although it has a couple of high-profile listings such as Arsenal, Nex has 85 listed companies compared with AIM’s 1000. Here’s a more ambitious idea for Hemsley … [Read more...] about Margareta Pagano: Why the Stock Exchange’s new boss should sell AIM
Masking.If you want to buy stock and you are a customer of Bank of America Merrill Lynch, you give BAML an order and it gives you back the stock. You might not care where it gets the stock, but you might; if you are a serious enough stock trader you probably do. There are a bunch of places where it could get the stock, but there are two big obvious categories. One place is: the stock exchanges. BAML could take your order to buy 100 shares of XYZ, go out to the New York Stock Exchange or Nasdaq or wherever, buy 100 shares, and deliver them to you. In the simplest form, if a stock is quoted on the major stock exchanges with a highest bid of $10.00 and a lowest offer of $10.01, and you send BAML an order to the effect of "just buy me 100 shares," BAML will go buy 100 shares at the offer -- $10.01 -- and deliver them to you for $1,001, plus a commission.Another place is: its own inventory. BAML is a "broker-dealer," not just a broker; in addition to going out and … [Read more...] about Merrill Lynch’s Secret Stock Deals