The yearlong decline in global equities that started with a selloff
in energy became a full-blown bear market Thursday as a rout in bank
shares extended losses in the broadest worldwide gauge past 20 percent.
The
MSCI All-Country World Index slipped 1.3 percent, pushing its decline
since May to 20 percent and marking the biggest retreat from risk since
Europe’s sovereign debt crisis in 2011.
Every industry has fallen since last year’s record high with decreases exceeding 25 percent in financial stocks and 30 percent in energy and commodities.
Selling from Tokyo to Frankfurt and New York is torpedoing one of the biggest expansions in share prices of the last century, particularly in the U.S. where the Nasdaq Composite Index has fallen 18 percent since July and the Standard & Poor’s 500 Index is about 125 points from its own bear market.
Investors are running for cover amid concern the rout in oil prices will destabilize credit markets and saddle banks with losses.
Only once in seven years have global stocks teetered as precariously as they are now. The MSCI gauge fell more than 24 percent between May and October of 2011 as Europe sovereign crisis raged and S&P stripped the U.S. of its AAA credit rating.
The latest decline trims an advance that from March 2009 to its height last May added about $47 trillion to equity values globally.
Equities markets have been buffeted by everything from China’s slowdown to the selloff in oil and rising U.S. interest rates, sending them to the worst start to a year on record. The rout in the oil industry is rippling through financial markets amid growing signs that credit quality is worsening.
U.S. bonds are now indicating the slowest inflation since May 2009 as investors pile into haven assets. In a departure from past bouts of global weakness, global markets this year are getting little help from the U.S.
The world’s biggest economy was sluggish enough to keep Janet Yellen’s Fed from hiking rates until December, and now corporate earnings are eroding. The spread between an index tracking global stocks outside the U.S. and the MSCI All-Country index is now the smallest since Aug 2015.
Every industry has fallen since last year’s record high with decreases exceeding 25 percent in financial stocks and 30 percent in energy and commodities.
Selling from Tokyo to Frankfurt and New York is torpedoing one of the biggest expansions in share prices of the last century, particularly in the U.S. where the Nasdaq Composite Index has fallen 18 percent since July and the Standard & Poor’s 500 Index is about 125 points from its own bear market.
Investors are running for cover amid concern the rout in oil prices will destabilize credit markets and saddle banks with losses.
Only once in seven years have global stocks teetered as precariously as they are now. The MSCI gauge fell more than 24 percent between May and October of 2011 as Europe sovereign crisis raged and S&P stripped the U.S. of its AAA credit rating.
The latest decline trims an advance that from March 2009 to its height last May added about $47 trillion to equity values globally.
Equities markets have been buffeted by everything from China’s slowdown to the selloff in oil and rising U.S. interest rates, sending them to the worst start to a year on record. The rout in the oil industry is rippling through financial markets amid growing signs that credit quality is worsening.
U.S. bonds are now indicating the slowest inflation since May 2009 as investors pile into haven assets. In a departure from past bouts of global weakness, global markets this year are getting little help from the U.S.
The world’s biggest economy was sluggish enough to keep Janet Yellen’s Fed from hiking rates until December, and now corporate earnings are eroding. The spread between an index tracking global stocks outside the U.S. and the MSCI All-Country index is now the smallest since Aug 2015.
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