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US stocks closed lower on Wednesday, finishing at their lowest level since August 23.
The stock selloff began Tuesday, following a weak manufacturing report. Today markets turned lower on worse-than-expected private payrolls, concerns about Friday’s jobs report and a lack of good news to counterweigh the soured sentiment.
Investors are once again hiding out in boring bonds.
The 10-year Treasury rate, which moves in the opposite direction of the price, stood at 1.75% shortly before that alarming manufacturing report was released. It slumped to as low as 1.58% on Wednesday as US stocks tumbled.
Recession fears drove a similar push into bonds last month. The 10-year Treasury yield plunged below 1.43% in early September, flirting with record lows.
Investors are now a lot more skeptical of IPOs -- especially those still bleeding red ink.
The index was last down 2%, or 529 points.
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The Federal Reserve doesn't have much room to lower interest rates if the next recession strikes soon. That could mean a return of unorthodox steps such as the Fed's financial crisis bond-buying program, known as quantitative easing.
Speaking at a University of San Diego event, Williams credited QE with keeping mortgage rates and corporate borrowing costs low as well as boosting financial conditions would lead to runaway inflation. That didn't pan out.
But some say QE did help deepen America's wealth inequality by boosting asset prices, which disproportionately benefits more affluent families.
But Williams doesn't sound concerned about the unintended consequences.
"When we did forward guidance and QE back in the day we didn't have a lot of experience," Williams said. "We've learned that some of the concerns about the costs and potential negative effects ended up being much smaller than some of the fears."
He said the US economy is strong enough to avoid recession. The unemployment rate remains low and consumer spending is healthy, he said. And, he points out, the American consumer is the biggest contributor for GDP growth.
That said, given the weakness in recent economic data, "the Fed may cut rates again," Memani said.
The Invesco executive believes the downward trend in the data is bottoming out, and the effects of Fed's easing in recent months will improve things in the near term.
Assuming that economic data and growth stabilize, along with lower interest rates, "there's a good case for the markets to go higher," Memani said.
A trade deal would also be very good for the market, he added, as so far the trade war has "made a bad situation worse." And as for Friday's jobs numbers, "I think they'll come in around expectations," he said.
US stock indexes are sharply lower Wednesday, but the poor performance can't just be blamed on one thing.
Prior to this week, risks like Brexit, US-China trade tariffs, the geopolitical situation around Iran, Saudi Arabia's oil production and the impeachment inquiry into President Donald Trump have been have been on investors' minds.
Tuesday's weaker-than-0expected manufacturing data was just "the last ingredient in the recipe" to get investors to understand that there many things that can move the market, Corpina said.
Stocks are deep into the red today, with the Dow shedding more than 500 points at its lowest point.
Analysts and market participants believe the weakness in the market is related to Tuesday's weaker-than-expected manufacturing report, which showed that the sector contracted for a second month in a row in September. The monthly index dropped to its lowest since June 2009.
But one person who doesn't agree is President Donald Trump, who said on Twitter that the impeachment inquiry was weighing on the market.
Stocks have widely shrugged off impeachment, because most market participants assume that the president won't be removed from office.
Today, "the primary driver of what we’re seeing the last few days is economic numbers," said Keith Lerner, chief market strategist at SunTrust.
The ongoing trade war with China and slowing global growth are also weighing on the market. It's hurting business executives' confidence, too.
"We really need to see at least a truce or not any further escalation. Otherwise that would be a big risk," Lerner said.