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New York Post
Wall Street bloodbath: Dow, Nasdaq plummet as renewed recession fears trigger global sell-off
By James Franey, Ariel Zilber,
4 days ago
Wall Street nosedived on Monday, as fears of the United States tipping into recession following weak economic data last week rippled through global markets.
The Dow fell more than 1,000 points on Monday Getty Images
The Dow Jones Industrial Index plunged more than 1,033 points, capping a drop of nearly 10% since hitting a near-record 41,183 last Wednesday afternoon when Fed Chair Jerome Powell hinted that rate cuts were “on the table” for September .
The tech-heavy Nasdaq slid 3.4% as Apple, Nvidia and the other so-called Magnificent Seven companies that used to be the stars of the stock market continued to wilt.
Wall Street’s so-called “Fear Index” jumped to a high of 65.73 before the market opened, up about 42 points from its close on Friday. The VIX pared gains and closed at 38.57, its highest in nearly four years. “There’s no question that last week something was broken (in markets) and it’s going to take some time to fix this damage,” said Joe Tigay, portfolio manager for Rational Equity Armor Fund.
The mega-cap Mag 7 – which also includes Tesla, Amazon, Meta, Microsoft and Google-parent Alphabet – lost more than $650 billion in combined market value. AP
That fix is increasingly a call for Powell to call an emergency Fed meeting to immediately cut rates ahead of their scheduled September sit-down.
“I’m calling for a 75-basis point emergency cut in the Fed funds rate, with another 75-basis point cut indicated for next month at the September meeting,” Wharton School professor emeritus of finance Jeremy Siegel told CNBC on Monday morning.
But he added: “Those are usually reserved for emergencies, like COVID, and an unemployment rate of 4.3 per cent doesn’t really seem like an emergency.”
A cut would ease the pressure on US households and companies by making it cheaper to take out loans and providing an eventual boost to economic growth.
“Evidence certainly points to a slowing economy. But slowing and slow are two very different points,” said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers.
Call grew for Fed Chair Jerome Powell to call an emergency Fed meeting to immediately cut rates ahead of their scheduled September sit-down AP
“Lower prices certainly can have a massive psychological effect. But investors need to step back and look at the fundamental story, which still remains decent.”
Whether the Fed moves now or in September, any cut before the presidential election in November will thrust the independent central bank into the middle of the political campaign between former Republican president Donald Trump and Democratic Vice President Kamala Harris.
Trump has previously accused Powell — whom he first nominated to run the Fed — of displaying political favoritism toward the Democratic Party, and suggested that he would not reappoint the central banker as Fed chair if he wins in November.
With Post Wires
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