Investors in Europe, Asia and New York were spooked by US data that include worse-than-expected job numbers on Thursday, prompting concern that the world’s largest economy is in worse shape than previously thought.
In the last month, the prospect of a recession in some of the world’s biggest economies has sent the cost of a barrel of Brent crude falling from almost $88 to below $78. He added: “What really matters now is whether money managers and traders feel sentiment has become too pessimistic, or if this deleveraging and risk aversion manifests into even higher volatility and drawdown.
The unemployment rate increased to a three-year high of 4.3%, while US manufacturing activity also slumped, falling to an eight-month low in July as new orders tailed off. “So much had been invested around the scenario of a soft landing, that anything that even suggests something different is difficult.”