The U.S. stock market suffered from a massive two-day sell-off which began Wednesday morning and continued through Thursday’s close, spreading into the major markets of Europe and Asia as well.
Most analysts attributed the tumble to fears that the escalating trade war with China could linger or even accelerate in coming months, raising the costs of industrial production and damaging prospects for U.S. exports. Others expressed fears that our economy will slow down due to rising interest rates and rip the floor from beneath overvalued stocks.
The mini crash first prompted the President to conclude that the Federal Reserve had “gone crazy” by raising rates, but, subsequently, state that the correction was overdue.
The sharp decline in equities was accompanied by severe selling of crude oil and gasoline but a stampede of gold buying. The yellow metal, often seen as a safe haven during stock market swings, reached a two-month high on Thursday’s close in New York.
To fully capture the market moves, however, one must look beyond North America. The U.S. stock markets trade for only 6 ½ hours per day, missing much of a day’s global news. As a result, many people flock toward the futures markets that are open nearly 23 hours per day, trading contracts on the Dow, NASDAQ and S&P 500.
When markets move as quickly as they did this week, many of the big moves occur outside of normal market hours, leaving some of the biggest opportunities and risks to the international traders, hedge funds, and night owl investors following futures markets overnight.
**Hurricane Michael Rips through Cotton Fields
As Hurricane Michael battered Florida, Alabama, Georgia, and the Carolinas, it wrought destruction on homes, businesses, beaches, and agriculture. Major products from the affected area include poultry, pecans, peanuts, and cotton.
For the cotton market, all eyes were on Georgia, the second-largest cotton growing state. Almost all this year’s cotton crop was about ready to be harvested, but nearly 90% was still in the field as the storm approached.
High winds and heavy rains battered the crop, flooding fields, tipping plants over, or blowing away the valuable cotton bolls. The full extent of the damage is still unknown, but some estimates are placing agricultural losses near $1 billion. Cotton prices rose nearly 2 cents per pound to 78.60 at midday Friday.