FYI: U.S. stocks and government-bond yields slumped as fresh data showed that the manufacturing sector contracted in August, adding to worries about the global economy and impact of trade tensions between the U.S. and China.
The Dow Jones Industrial Average lost 285 points, or 1.08%, . The S&P 500 dropped 0.69% and the Nasdaq Composite fell 1.11%.
New data released Tuesday showed that the Institute for Supply Management’s gauge of U.S. factory activity slipped for the first time since 2016. The figures came after a string of lackluster manufacturing data around the world and as trade talks between the U.S. and China spurred a wild August for major indexes. Meanwhile, many investors have been preoccupied with the prospect of a recession on the horizon.
Fears about trade and the global economy weighed on commodities Tuesday, sending prices for crude oil and copper lower. Shares of energy and industrial companies were some of the biggest losers in the S&P 500.
Bellwether stocks fell as Caterpillar dropped roughly 2.7%. Boeing lost 3.2% and 3M shed 2.5% in recent trading, underperforming the broader market.
Investors flocked to government bonds and gold—assets considered relatively safer—as they fled riskier bets such as stocks. The yield on the 10-year U.S. Treasury note fell to 1.462% Tuesday, according to Tradeweb, from 1.503% Friday. Gold prices jumped.
The selling in stocks also comes after Beijing said it had lodged a complaint with the World Trade Organization over U.S. tariffs. On Sunday, the U.S. imposed fresh tariffs on Chinese goods including clothing, tools and electronics as retaliatory Chinese tariffs on U.S. soybeans, crude oil and pharmaceuticals also took effect.
Meanwhile, Japan on Monday said its manufacturers cut spending during the second quarter for the first time in two years, adding to a series of recent data suggesting the U.S.-China trade fight was damping the world economy.
The Chinese yuan fell to its lowest level in more than a decade in offshore trading, as it neared 7.2 against the U.S. dollar. In August, it passed the psychologically significant level of more than seven to the dollar, aggravating Washington, which accused China of currency manipulation.
Meanwhile, the British pound hit its lowest level against the dollar in 34 years after Prime Minister Boris Johnson warned lawmakers not to thwart his plans for quitting the European Union with or without a deal on Oct. 31.
Sterling fell against both the dollar and the euro, touching $1.1969 and €1.0950. Before the 2016 referendum, a pound bought $1.4687.
The yield on U.K. 10-year gilts fell to 0.341% before recovering to 0.362%, and the yield on German 10-year bunds approached record lows at minus-0.725%. Bond prices rise as yields fall.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-09-03/your-evening-briefingMarketWatch:
https://www.marketwatch.com/story/dow-futures-head-200-points-lower-as-china-us-trade-angst-set-to-start-september-on-a-sour-note-2019-09-03/printWSJ:
https://www.wsj.com/articles/global-stocks-slip-amid-trade-tensions-weak-data-11567498610Bloomberg:
https://www.bloomberg.com/news/articles/2019-09-02/asian-stocks-set-to-slip-as-trade-war-doubts-firm-markets-wrapIBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-dragged-by-apple-boeing-stocks-china-fears-weigh/CNBC:
https://www.cnbc.com/2019/09/03/stock-market-wall-street-monitors-latest-us-china-trade-tariffs.htmlReuters:
https://uk.reuters.com/article/us-usa-stocks/weak-factory-data-trade-frictions-pull-wall-street-lower-idUKKCN1VO1ECU.K:
https://uk.reuters.com/article/uk-europe-stocks/weak-data-brexit-woes-knock-european-stocks-off-one-month-high-idUKKCN1VO0N4Europe:
https://www.reuters.com/article/us-europe-stocks/weak-data-brexit-woes-knock-european-stocks-off-1-month-high-idUSKCN1VO0MLAsia:
https://www.cnbc.com/2019/09/03/asia-markets-september-3-rba-us-china-trade-war-currencies.htmlBonds:
https://www.cnbc.com/2019/09/03/us-bonds-wall-street-monitors-economic-data-treasury-auctions.htmlCurrencies:
https://www.cnbc.com/2019/09/03/the-us-dollar-just-hit-a-two-year-high-and-is-threatening-to-make-another-major-milestone.htmlOil:
https://www.cnbc.com/2019/09/03/oil-markets-south-korea-economic-data-us-china-trade-war-in-focus.htmlGold:
https://www.cnbc.com/2019/09/03/gold-markets-us-dollar-in-focus.htmlWSJ: Markets At A Glance:
https://markets.wsj.com/usMajor ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitorSPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerSPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectorsCurrent Futures:
https://finviz.com/futures.ashx 
