US markets crumbled overnight as concerns that the US economy is heading toward a recession in 2023 took their toll. The Dow Jones fell 351 points (-1.03%). At best, it was up 60 points, and at worst, it was down 529 points. The NASDAQ took a heavy blow, down 2.00%, with selloffs in tech giants including Apple, Meta, and Amazon, and the S&P 500 fell 1.44%. The recent rally looks like it was very overdone, with markets sobering up as we see a correction. In Europe, STOXX 50 -0.4%, FTSE -0.6%, CAC -0.1%, and DAX -0.7%. SPI Futures are down 37 points (-0.51%), following a 34-point loss yesterday, as the RBA raised interest rates by 25bps.

CEOs from the biggest banks, including Goldman Sachs, Morgan Stanley, and JPMorgan, shared their concerns about the economic outlook. Goldman warned about cutting pay and jobs with “bumpy times ahead,” while Bank of America is slowing down hiring, with fewer employees leaving as a possible economic contraction lies ahead. Morgan Stanley is set to cut around 2,000 global positions, and JPMorgan says a “mild to hard recession” may hit next year. Money moved to the “safe haven” US dollar as bond yields fell. The US 10-Year Yield was down 6.9bps, while the 2-Year Yield fell 3.0bps. The USD index rose for the second straight session, up 0.27%, while the Aussie Dollar settled a little lower, down 0.12% to 66.85c.

In commodities, oil prices fell, with WTI down 3.41% to its lowest price this year after touching a higher above $123/barrel in March. Brent crude was down 4.14% below $40/barrel for the second time in 2022. Base metals were mixed with nickel, zinc, and tin, finishing higher, while copper, aluminium, and lead all closed lower. Gold rose 0.29% after a hard fall in the previous session. Coal was back on the winner’s list, up 0.90% overnight. Bitcoin steadied, up 0.24%.

Catch up on all the latest with Henry Jennings on today’s Pre-Market Podcast.

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