FYI: U.S. stocks slumped Tuesday, kicking off the fourth quarter on a down note as disappointing manufacturing data added to concerns about the health of the domestic economy.
The new data showing U.S. factory activity contracted for a second consecutive month adds to growing evidence of a global manufacturing slowdown, which many economists attribute to the escalating trade dispute between China and the U.S.
Investors will be closely watching as the two countries engage in planned high-level trade talks in Washington later this month, and they will be parsing third-quarter earnings reports in the coming weeks to see what big companies have to say about the effects of the trade war on their business.
The S&P 500 fell 1.23%, giving up earlier gains. All 11 sectors tumbled, led by the industrial and materials segments, which dropped more than 2%. The Dow Jones Industrial Average lost 343 points, or 1.28%, while the Nasdaq Composite dropped 1.13%.
The Institute for Supply Management said its U.S. manufacturing index fell to 47.8 in September—the lowest since June 2009—from 49.1 in August. Readings below 50 indicate a contraction in manufacturing activity.
Investors flocked to the safety of U.S. government bonds and gold following the release of the data. The yield on the U.S. 10-year Treasury note fell to 1.639%, from above 1.7% earlier in the session. Gold prices flipped higher, climbing 1.1%.
Among Tuesday’s big stock movers, online brokers slumped after Charles Schwab said it would eliminate commissions on online stock trades, furthering the e-broker price wars. Shares of Charles Schwab fell 9.7%, while TD Ameritrade Holding plunged 24% and E*Trade Financial sank 17%.
Elsewhere, European stocks edged lower, as manufacturing sentiment in the continent fell to the lowest level in nearly seven years. The Stoxx Europe 600 fell 1.3%.
Adding to the subdued outlook, the eurozone’s annual rate of inflation fell to 0.9% in September, its lowest level in almost three years, data published Tuesday showed.
Earlier in the day, Australia’s benchmark index rose 0.8% after the Australian central bank cut interest rates by a quarter of a percentage point to a record low 0.75% and left the door open to more cuts.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-01/your-evening-briefingAP:
https://finance.yahoo.com/news/major-us-stock-indexes-fared-202236352.htmlMarketWatch:
https://www.marketwatch.com/story/stock-market-on-track-to-begin-october-trade-higher-china-kicks-off-70th-anniversary-2019-10-01/printWSJ:
https://www.wsj.com/articles/stocks-rise-as-investors-take-global-economys-pulse-11569917995Bloomberg:
https://www.bloomberg.com/news/articles/2019-09-30/asia-stocks-set-for-modest-gains-dollar-rises-markets-wrapIBD:
https://www.cnbc.com/video/2019/10/01/cashin-market-building-up-a-real-head-of-steam-not-sure-of-direction.htmlCNBC:
https://www.cnbc.com/2019/10/01/dow-futures-us-china-trade-wto-wall-street.htmlReuters:
https://uk.reuters.com/article/us-usa-stocks/wall-street-falls-as-monthly-factory-activity-contracts-to-10-year-low-idUSKBN1WG3R1U.K:
https://uk.reuters.com/article/uk-britain-stocks/uk-stocks-retreat-as-weak-u-s-data-adds-to-global-growth-fears-idUKKBN1WG32MEurope:
https://www.reuters.com/article/us-europe-stocks/weak-u-s-euro-zone-data-push-european-shares-lower-idUSKBN1WG33GAsia:
https://www.cnbc.com/2019/10/01/asia-markets-october-1-rba-rate-decision-currencies-and-oil.htmlBonds:
https://www.cnbc.com/2019/10/01/treasury-yields-rise-amid-cautious-trade-optimism.htmlCurrencies:
https://www.cnbc.com/2019/09/30/forex-markets-us-china-trade-war-in-focus.htmlOil
https://www.cnbc.com/2019/10/01/oil-markets-us-oil-output-opec-in-focus.htmlGold:
https://www.cnbc.com/2019/10/01/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/fut 
