GRIM MILESTONE WATCH: The Dow Drops Below 30,000.
The Dow Jones Industrial Average had a bad morning today and lost nearly 700 points, putting it below 30,000 for the first time in almost two years.
Between the Fed’s monetary policy and continued concerns over inflation, traders could send stocks into a bear market. If the Dow closes below 29,439.72, it would be the first such instance since the Covid recession.
Do the numbers signify a global bear market?
Business surveys Friday showed economic activity in Europe declined sharply in September, highlighting how growth outside the U.S. has also been knocked off course. Meanwhile, the U.S. dollar is experiencing a once-in-a-generation rally that threatens to worsen the slowdown in global growth and effectively export inflation around the globe.
Central banks around the world, including policy makers in Norway, Switzerland and South Africa, have lifted borrowing costs. The global commitment to policy tightening has further eroded hopes among investors for a soft landing, or only a modest hit to growth instead of a full-blown recession.
“All central banks are singing from the same hymn sheet: They’re trying to get on top of inflation no matter what,” said Antoine Bouvet, a senior rates strategist at ING. “The Fed set the tone very clearly…they will continue regardless of the economic pain inflicted on the economy.”
The pan-European Stoxx Europe 600 slid 2.3%, dropping to its lowest level since December 2020.
Usually, when stocks fall, bonds offer a haven to nervous investors. But prices have been dropping for both this year, an unusual coupling that highlights just how anxious many buyers are, and how starkly different the investing environment has been in the first nine months of the year. Yields on the 10-year Treasury and two-year Treasury once again roamed near levels not seen in more than a decade.
The 10-year U.S. Treasury yield rose to 3.695% this week, notching an eighth consecutive week of gains. Two-year Treasury yields climbed to 4.212%, the highest since October 2007. Yields rise as bond prices fall.
“The Dow Is 1,400 Points Lower Than When Biden Took Office,” the Daily Wire notes.
Exit question: Is Team Biden purposefully grinding down the middle class?