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Global stock sell-off intensifies after weak US jobs data

Good morning.

Today we’re covering:

  • The Democrat party attack line that is rattling Republicans

  • Brazil’s warning to international carbon credit buyers

  • Venezuela’s opposition leader emerges from hiding

But first, Friday’s weaker than expected US labour market data has intensified the global stock sell-off, causing traders to flock to safer assets as fears of a recession mount.

US stock market futures fell ahead of the open today. European stocks opened sharply down. And various Asian indices have plummeted, including Japan’s Nikkei, which has suffered its biggest single-day fall since the “Black Monday” crash in 1987.

Investors are concerned that the US Federal Reserve might risk bringing on the very recession it is trying to avoid by cutting rates too slowly, after last week’s decision to hold rates at 5.25-5.5 per cent.

Friday’s jobs report, showing fewer jobs added to the US economy than expected, triggered the Sahm rule, a recessionary indicator. Concomitantly, crypto markets plunged and treasuries rallied, as investors ditch riskier assets in favour of recession-proof ones.

Elsewhere in markets:

  • FT View: Investors are learning that revenue gains from artificial intelligence will take time after a rollercoaster earnings season for tech stocks, our editorial board writes.

  • Berkshire Hathaway: Warren Buffett’s company has halved its stake in Apple as part of a selling spree in which the billionaire investor dumped $76bn of stocks.

And here’s what I’m keeping tabs on today:

  • Economic data: Services purchasing managers’ indices are due for the US and Canada.

  • Companies: Tyson Foods, Infineon Technologies and Lucid Motors report.

Five more top stories

1. Vice-president Kamala Harris has officially secured the Democratic presidential nomination. Her campaign raised $310mn in July, eclipsing the Trump campaign’s $139mn over the same period.

2. The Department of Justice and the Federal Trade Commission have sued TikTok, its Chinese parent ByteDance and their affiliates, alleging “widespread violations” of US child privacy law.

3. The US government has stepped up calls for its citizens to leave Lebanon while ​​commercial flights are still available, as anxiety mounts in a region braced for the possibility of a full-blown war between Israel, Iran and the Hizbollah militant group.

  • Boycotts: Consumers in Muslim countries are shunning western food and drinks brands over their perceived support for Israel, hitting revenues.

4. Brazil’s environment minister has urged greater caution from international buyers of carbon credits, after police uncovered allegedly fraudulent emissions-offset schemes on stolen land in the Amazon. 

5. Venezuelan opposition leader María Corina Machado, who had not been seen in public since Wednesday after President Nicolás Maduro publicly called for her jailing, emerged from hiding on Saturday to appear at an anti-government rally in Caracas to thousands of flag-waving supporters.

The Big Read

© FT montage/Bloomberg/Reuters

Delaware, the legal home to two-thirds of the companies in the S&P 500, has been in the spotlight owing to Elon Musk’s $56bn pay package. But the public fight between the billionaire and judge Kathaleen McCormick has many fearing that the state’s position could be undermined.

We’re also reading . . . 

  • Olympics: The unique chance to watch star players such as Stephen Curry, LeBron James and Kevin Durant play together have made basketball the Games’ hottest ticket.

  • Reluctance: Top asset managers are struggling to encourage investors to embrace risk.

  • ‘Strange new alliance’: The US’s “childless cat ladies” fight an odd coalition of pronatalists and folks who want to restrict abortion.

  • Organised crime: Paraguay’s President Santiago Peña has urged European countries to do more to help South America fight drug trafficking.

Chart of the day

Top private capital groups have deployed more than $160bn in the latest quarter in anticipation of an increase in buyout and merger activity, as the US Federal Reserve edges closer to cutting interest rates.

Column chart of Capital deployed, by quarter ($bn) showing Private investment giants are putting money to work

Take a break from the news

In a forgotten picture from August 26 1944, the day after the liberation of Paris from the Nazis, General Charles de Gaulle walks down the Champs-Élysées amid scenes of excitable tumult. But who is the man with his arm in a sling, and how does his apparent “photobombing” rewrite second world war history?

General Charles de Gaulle walks down the Champs Élysées on August 26 1944. Georges Dukson marches to his left, raising an arm
© Serge de Sazo/Gamma-Rapho/Getty Images

Additional contributions from Sophie Spiegelberger and Tee Zhuo

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