U.S. stocks kicked off August sharply lower as fresh data prompted fears of a worsening economic outlook.
Initial jobless claims rose the most since August 2023. The ISM manufacturing index, a barometer of factory activity in the U.S., came in at 46.8%, worse than expected and a signal of economic contraction. "First of all, the hawkish Bank of Japan caused an implosion of the carry trade over a short-term basis. We also had bad manufacturing data out of the U.S. and some employment sub-indicators which scared markets," he continued.
Asked whether the sell-off means investors should be thinking about hitting the panic button, Chehab replied, "No, I don't think so. And that's because from a technical perspective there is a lot of support, in terms of moving averages and key technical levels."