- Reuters/Brendan McDermid
Here is what you need to know.
Global markets are under pressure. The Dow Jones industrial average is pointing to a 500-point drop at the open, or about another 2%. Overnight, Hong Kong’s Hang Seng (-5.12%) was hit hard. Markets in Europe are all down by close to 2%.
The Dow posted its biggest point decline on record. The Dow fell by 1,175 points, or 4.6%, during Monday’s sell-off. In percentage terms, the drop pales in comparison to the 22.6% decline in the Dow on Black Monday in 1987 or the 12.8% drop in the 1929 stock crash.
‘There’s no place to hide’: A Wall Street chief strategist breaks down the stock market’s plunge. Bruce Bittles, the chief investment strategist at Robert W. Baird & Co., attributes a big portion of the selling to a breakdown in the historical relationship between stocks and bonds.
The stock market’s fear gauge spiked the most on record. The Cboe Volatility Index, or VIX, spiked 84% on Monday, its largest single-day increase on record, according to data going back to 1990.
2 red-hot investment products blew up. The VelocityShares Daily Inverse VIX Short-Term ETN (XIV) and the ProShares Short VIX Short-Term Futures ETF (SVXY), products designed to return the inverse of the VIX, saw their combined value shrink to $150 million from $3 billion in after-market trading, according to estimates from Macro Risk Advisors.
Only 2 S&P 500 stocks gained ground. Church & Dwight and TripAdvisor were the only two stocks in the benchmark index to finish higher, gaining 2.63% and 3.64%.
Money was pouring into crypto during the stock market’s sell-off. Cryptocurrency’s market cap jumped 7%, to $335 billion from its low of $310 billion, as stocks stumbled into their close. They still suffered big losses on Monday. Cryptocurrencies are under pressure Tuesday, with bitcoin down 9%, Ethereum off 12.1%, and Ripple’s XRP lower by 9.1%.
Lululemon’s CEO unexpectedly resigns. Laurent Potdevin has resigned as Lululemon CEO after falling short on the company’s code of conduct, a company press release said. Shares slumped by more than 3% in after-hours trading Monday.
Earnings reports keep coming. Allergan and General Motors report ahead of the opening bell, while Chipotle Mexican Grill, Disney, and Snap release their quarterly results after markets close.
US economic data flows. The trade balance and Jolts Job Openings will be released at 8:30 a.m. ET and 10 a.m. ET. The US 10-year yield is up 2 basis points at 2.72%.