Global Stocks, U.S. Index Futures Fall; Yen, Treasuries Rally
By Sarah Thompson
Nov. 20 (Bloomberg) -- Stocks slumped, sending the MSCI World Index to the lowest level since 2003, on concern bank losses will increase and corporate profits will crumble as the recession spreads. U.S. index futures dropped, while Treasuries and the yen rallied as investors shunned riskier assets.
UBS AG and ING Groep NV dropped more than 7 percent after Citigroup Inc.'s plan to buy troubled investment-fund assets fueled speculation of more bank writedowns. Copper declined for a third day and oil slid toward $50 a barrel, sending commodity producers lower. Treasuries rose, pushing two-year note yields to a record low as investors sought the safety of government bonds.
The MSCI World Index lost 2.2 percent to 803.37, the lowest since April 2003, at 10:33 a.m. in London. The MSCI Emerging Markets Index tumbled 4.7 percent, with Russia's Micex Index sliding as much as 9 percent before trading was interrupted for an hour.
``We're seeing a total collapse of trust in everything fundamental,'' said Espen Furnes, an Oslo-based fund manager at Storebrand Asset Management, which has the equivalent of $48 billion. ``There are no buyers in sight. This year will go down in history.''
More than $32 trillion has been erased from the value of global equities this year as the financial-market turmoil pushes countries from Europe to the U.S. and Japan into recession.
Europe's Dow Jones Stoxx 600 Index declined 3.3 percent. Standard & Poor's 500 Index futures lost 1.8 percent, while the MSCI Asia Pacific Index slid 5.1 percent.
- Markets are gearing up for more bad news. The Fed meeting minutes painted a bleak picture. So by end of day all index were down 5% plus with DJ leading the downside.
- That has the Market Monitor reading diving down to 411/ 3924 levels. That 411 is what I am watching for further drop to put in a trade.
- So far it has been steady drip drip selling, panic is yet to set in. When panic sets in then there are short term opportunities.