Categories: world

Dow dicks 400 points as fears mount

0-year Treasury bond yields to the lowest levels since late 2017. Crucially, the yield curve – the gap between short-term and long-term bond yields – has once again inverted. In the past, it has been a reliable predictor of eventual recessions. "The curve getting inverted could become a self-fulfilling prophesy," said Michael Block, market strategist at Third Seven Advisors. "It's freaking the hell out of everyone." The recent market slide has wiped about 6% off the S&P 500 since it closed at record highs in late April. The Dow has declined five weeks in a row, its longest weekly slump since 2011. Oil, copper tumble Energy stocks have also been crushed, driven lower by tumbling oil prices. US oil dropped 2.5% on Wednesday amid concerns about rising inventories and how trade will impact demand. Apache ( APA ) Baker Hughes [19659011] ( BHGE ) and Marathon Oil ( MRO ) declined about 3% apiece. Copper, another economically-sensitive commodity, fell 1.2% to four-month lows. European officials warn that US stocks are overpriced ” data-src-mini=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-small-169.jpg” data-src-xsmall=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-medium-plus-169.jpg” data-src-small=”http://cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-large-169.jpg” data-src-medium=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-exlarge-169.jpg” data-src-large=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-super-169.jpg” data-src-full16x9=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-full-169.jpg” data-src-mini1x1=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-small-11.jpg” data-demand-load=”not-loaded” data-eq-pts=”mini: 0, xsmall: 221, small: 308, medium: 461, large: 781″ src=”data:image/gif;base64,R0lGODlhEAAJAJEAAAAAAP///////wAAACH5BAEAAAIALAAAAAAQAAkAAAIKlI+py+0Po5yUFQA7″/> The Dow has lost about 6% in May, leaving it on track for its first losing month of 2019. The Dow has not had a release May since 2012. The CNN Business Fear & Greed Index is flashing "fear," compared with "greed" a month ago. The wave of selling brought back memories of December, when economic and trade fears…

0-year Treasury bond yields to the lowest levels since late 2017.

Crucially, the yield curve – the gap between short-term and long-term bond yields – has once again inverted. In the past, it has been a reliable predictor of eventual recessions. “The curve getting inverted could become a self-fulfilling prophesy,” said Michael Block, market strategist at Third Seven Advisors. “It’s freaking the hell out of everyone.”

The recent market slide has wiped about 6% off the S&P 500 since it closed at record highs in late April. The Dow has declined five weeks in a row, its longest weekly slump since 2011.

Oil, copper tumble

Energy stocks have also been crushed, driven lower by tumbling oil prices. US oil dropped 2.5% on Wednesday amid concerns about rising inventories and how trade will impact demand.

Apache ( APA ) Baker Hughes [19659011] ( BHGE ) and Marathon Oil ( MRO ) declined about 3% apiece.

Copper, another economically-sensitive commodity, fell 1.2% to four-month lows. European officials warn that US stocks are overpriced ” data-src-mini=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-small-169.jpg” data-src-xsmall=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-medium-plus-169.jpg” data-src-small=”http://cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-large-169.jpg” data-src-medium=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-exlarge-169.jpg” data-src-large=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-super-169.jpg” data-src-full16x9=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-full-169.jpg” data-src-mini1x1=”//cdn.cnn.com/cnnnext/dam/assets/190529113541-nyse-0524-restricted-small-11.jpg” data-demand-load=”not-loaded” data-eq-pts=”mini: 0, xsmall: 221, small: 308, medium: 461, large: 781″ src=”data:image/gif;base64,R0lGODlhEAAJAJEAAAAAAP///////wAAACH5BAEAAAIALAAAAAAQAAkAAAIKlI+py+0Po5yUFQA7″/>

The Dow has lost about 6% in May, leaving it on track for its first losing month of 2019. The Dow has not had a release May since 2012. The CNN Business Fear & Greed Index is flashing “fear,” compared with “greed” a month ago.

The wave of selling brought back memories of December, when economic and trade fears delivered the worst month on Wall Street since the Great Depression. The extreme turbulence almost ended the decade-long bull market in US stocks.

“I don’t think this is the start of a bear market,” said Block.

Even though the yield curve has inverted and manufacturing is struggling, other economic indicators look relatively healthy. Most notably, the United States added 263,000 jobs in April, lowering the unemployment rate to a 49-year low or 3.6%.

“While fears are definitely justified regarding tariffs and weakness abroad, the US economy is still on very solid footing,” said Mike Lowengart, vice president of investment strategy at E * Trade.

Investor moves into safe ports like utilities and bonds, Lowengart said, “doesn’t mean we’re anywhere near a recession.”

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