Goldilocks Is Over: Global Stocks Tumble On Fresh Growth Fears, China Crash

Friday, March 8, 2019
By Paul Martin

by Tyler Durden
ZeroHedge.com
Fri, 03/08/2019

Just days after Goldman warned that the Goldilocks rally is over, a selloff swept across world markets with global stocks set for their biggest weekly drop since December, after a plunge in Chinese stocks set the tone for global markets on Friday, with equities in Europe sliding alongside U.S. futures amid growing concerns about the state of US-China trade negotiations and global growth following yesterday’s ECB shocking GDP downgrade. The yen climbed with gold as investors once again scrambled to buy safe havens.

Traders will be closely watching the February U.S. jobs report on Friday (exp. 170K) for more clues on the state of the world’s biggest economy after ECB President Mario Draghi delivered fresh stimulus as he downgraded the outlook for the euro area. The move came during a week that saw China cut its goal for economic expansion, the Bank of Canada dial back its expectations for policy tightening and the Organisation for Economic Co-operation and Development lower its global outlook.

Until then, Europe’s Stoxx 600 Index sank the most in a month, with carmakers and miners leading declines, as global growth concerns continue to dominate market sentiment following yesterday’s ECB TLTRO announcement, pushing back of rate guidance and lowering of growth & inflation forecasts. Sectors are broadly in the red, led by the aforementioned Chinese trade data and fears of another global recession. Significantly underperforming its peers at the bottom of the Stoxx 600 are GVC Holdings (-17.0%) after the company CEO sold 2.1MM worth of shares alongside the Chairman selling 900k shares; with both sales at the price of GBP 6.66/shr. Not helping fears about an imminent European recession, German factory orders fell more than expected in January.

Shares from Sydney to Hong Kong fell, with China’s market slumping the most since October and suffering one of its worst days in years as traders interpreted a rare sell rating from the nation’s largest brokerage as a sign the government wants to curb gains.

Hang Seng (-1.9%) and Shanghai Comp. (-4.4%) slumped with underperformance seen in the mainland in which the CSI 300 slipped by the most so far this year. 10yr JGBs tracked the gains in T-notes amid declining yields in the aftermath of the dovish ECB, while the widespread risk averse tone and BoJ presence in the market in the short-end also contributed to the support for government bonds.

Weak Chinese trade data added to the negativity, with exports plunging over 20%, while imports from the US crashing the most on record.

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