Thursday, 16 October 2014

Markets fall on growth worries

Markets fell on Wednesday.

The STOXX Europe 600 plunged 3.2 percent but the S&P 500 recovered from an early tumble to finish 0.8 percent down for the day.

The US 10-year Treasury yield fell four basis points to 2.16 percent and oil declined as Brent crude fell 1.5 percent to a four-year low.

Allianz SE chief economic adviser Mohamed El-Erian thinks that “market volatility can be expected to continue in the days and weeks to come”.

Investors' concerns appear to be focused on weak economic growth, especially after a report today showed that US retail sales fell 0.3 percent in September.

Other US data showed that the Federal Reserve Bank of New York’s Empire State Index fell to 6.2 in October from an almost five-year high of 27.5 in September and producer prices fell 0.1 percent in September.

Nevertheless, the Federal Reserve's Beige Book published on Wednesday reported that the US economy expanded at a "modest to moderate" pace across much of the nation in recent weeks.

Elsewhere in the world, reports on Wednesday showed that China's inflation rate fell to 1.6 percent in September from 2.0 percent in August, Japanese industrial production fell 1.9 percent in August, more than the 1.5 percent decline initially estimated, but the UK unemployment rate fell to 6.0 percent in the three months to August, the lowest level since the three months to October 2008.

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