Stock markets: Wall Street plunges to close with biggest one-day loss since March 16

Wall Street plummeted on Thursday as investors reacted to renewed fears of a pandemic resurgence and digested dour economic forecasts from the U.S. Federal Reserve.

The sell-off was broad, with all 11 major sectors of the S&P 500 falling from nearly 4% to well over 9%.

 Read more at: Wall Street plunges to close with biggest one-day loss since March 16 - Reuters

US Economy: Dow plunges by more than 600 points in massive market sell-off - by Lucy Bayly

The Dow Jones Industrial Average sank by more than 600 points Monday, dragged down by a tumble in Apple and Amazon shares, mounting geopolitical concerns, and a strengthening dollar.

The S&P also stumbled, falling by 2 percent after shares in Goldman Sachs sank by more than 7 percent amid reports that Malaysia is seeking a multimillion-dollar refund from the investment firm for its role in the country’s 1MDB state fund money-laundering scandal.

The tech-heavy Nasdaq composite index was down 2.8 percent.

Apple had pulled down tech stocks early Monday after Lumentum, a key supplier to the Cupertino-based giant, said it was cutting its outlook for the second quarter of 2019 based on lower forecast production volume for one of its major clients.

Tobacco stocks also had a bad day, tumbling double digits on news that the Food and Drug Administration is mulling a ban on menthol cigarettes. 

Read More: Dow plunges by more than 600 points in massive market sell-off

US Economy: Record Global Sell-Off of U.S. Debt Could Trigger Economic Collapse

Foreign governments buy U.S. debt because of the dollar's status as the world's reserve currency – the American economy has long been viewed as a safe place to invest. That's why the amount of U.S. debt held by foreign nations has increased more than six-fold since 2001.

But that's all changing now – events that could spark a U.S. economic collapse are already underway…

The Wall Street Journal revealed recently that China – the largest holder of U.S. investments – is ridding itself of its U.S. government bonds at the fastest rate in history.

In fact, a global sell-off of epic proportion is taking place.

Central banks in China, Russia, Brazil, and Taiwan are selling U.S. government bonds at such a pace that it's caused the most dramatic shift in the $12.8 trillion Treasury market since the 2008-2009 financial crisis.

Foreign official net sales of U.S. Treasury debt maturing in at least one year hit $123 billion in the 12 months ended in July, according to Deutsche Bank Securities Chief International Economist Torsten Slok, reported WSJ. That's the biggest decline since data started to be collected in 1978.

By contrast, foreign central banks purchased $27 billion of U.S. notes and bonds in the prior 12-month period.

Foreign central bankers' massive offloading of U.S. debt sends this dangerous signal…

Read more: WARNING: Record Global Sell-Off of U.S. Debt Could Trigger Economic Collapse

US Economy: Dow plunges 630 points after S&P downgrade

As Wall Street tumbled, pundits and prophets of doom pointed their fingers at the Standard and Poor's downgrade of U.S. debt. Those on the political right pointed barbed tongues at President Barack Obama and his policies. And by the end of the day, all the main stock market indexes on Wall Street pointed markedly lower.

But political theater and blame games aside, there is one important reason why U.S. and global markets are a mess, and it doesn't have all that much to do with the S&P downgrade.

The U.S. economy, the world's largest, is in for some seriously slow growth for the foreseeable future. And there's very little that anyone can do about it. Longer term, of course, the U.S. is struggling with a serious debt burden — an uncomfortable truth that the Washington, D.C. debt ceiling debacle and subsequent S&P downgrade made abundantly clear.

But looking deeper, there's another troubling trend to consider: globalization — which for years benefited the wide open U.S. economy by offering U.S. companies new markets and U.S. consumers cheaper prices — is today fundamentally changing the structure of how America, Inc. operates. According to Nobel Prize-winning economist Michael Spence, growth and employment in the U.S. economy are beginning to diverge. The rise of China, India and other rapidly developing countries is creating permanent shifts in the structure of the U.S. economy; namely, highly educated American workers are finding opportunities, while those with less education struggle with worsening job prospects and stagnating incomes.

This is hardly a recipe for broad-based, consumer-driven growth the U.S. economy needs. It's a gutting of the middle class that, if left unchecked, could have a devastating effect."The United States should brace itself for a long period of high unemployment," Spence warns.

So what's the solution? Most policymakers point to things that take time, cost money and, of course, add to the country's debt problems, such as sustained investments in education, infrastructure and new forms of cleaner energy that could help boost long-term economic growth.


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