NEW YORK (Reuters) – Investors fled U.S.-based stock funds in the latest week, setting those investments up for their biggest month of withdrawals on record, Lipper data showed on Thursday.
More than $80.7 billion poured out of U.S.-based stock funds during the 14 days through Dec. 19, representing about 1 percent of the total assets in such funds, according to the research service.
The selling continued during a week in which the U.S. Federal Reserve raised rates for the ninth time in about three years and reaffirmed its commitment to tightening monetary policy even as markets prepare for a slowdown in economic growth. U.S. stocks slid again on Thursday, with the Nasdaq Composite on the cusp of confirming it is in bear market territory. [.N]
“Surging borrowing costs for companies in the US and Europe threaten recession within months and resemble events leading up to the global credit ‘heart attack’ in August 2007.”
“Two of them were in 1987 — during the famous Black Monday crash, when the Dow Jones Industrial Average lost 23 percent in one day, and then again during the following session. The rest were in the aftermath of the collapse of Lehman Brothers in October and November 2008.”
Surging borrowing costs for companies in the United States and Europe threaten recession within months and resemble events leading up to the global credit ‘heart attack’ in August 2007.
Risk spreads on American high-yield debt have jumped 130 basis points to 446 since early October. The weakest CCC junk grades have jumped 280 points to 1,233.
Credit experts say this sudden stress is the delayed fall-out from months of double-barreled monetary tightening by the US Federal Reserve.
Wall St continues to fall as there is 0 appetite to step in and buy. S&P 500 drops to lowest since Sep, now -7.7%ytd. Stocks may be very oversold & sentiment is awful but unfortunately the twin vacuums of news and liquidity are making for a toxic environment right now, JPM says. pic.twitter.com/132NuIzHPz
— Holger Zschaepitz (@Schuldensuehner) December 20, 2018
60% of energy stocks hit a 52wk low pic.twitter.com/XoParwCTMt
— Teddy Vallee (@TeddyVallee) December 20, 2018
Life comes at you fast pic.twitter.com/TpecZVL2aX
— OCCUPY WISDOM (@OccupyWisdom) December 21, 2018