GLOBAL STOCK MARKETS are falling today after an underwhelming US job market report on Friday stoked fears that the country, and the largest global economy, is heading into a recession. 

Trading boards showed a sea of red following another hefty day of losses, most notably for the Japanese Nikkei and Topix indexes which suffered the most amount of losses since 1987.

The jobs report on Friday showed the US economy added just 114,000 jobs last month, well down from June and far fewer than expected, while unemployment rates increased to the highest levels since October 2021.

The report stoked concerns among economists who believed that the underwhelming data was an early sign of a pending recession. It compounded existing concerns that the US’ central bank, the Federal Reserve, is not moving quick to intervene.

US President Joe Biden gave no indication that any of the reports were a cause for concern on Friday, however.

The President acknowledged that employment rates were increasing more “gradually” than expected, but reasoned that it was due to decreasing inflation rates. Biden said that the country was “making progress”.

Speculation among marketeers says otherwise, as economists believe the US economy is in for a wake up call with a hard landing. While no official authority has corroborated this analysis, volatility in the market has continued.

Losses in Japan and wider Asia were followed by the European stock exchange while, in the US, both the S&P 500 and the Nasdaq fell sharply. 

This morning, the Dow Jones, S&P 500 and the Nasdaq opened much lower. All 30 stocks in the Dow are in the red, while tech giants Alphabet, Netflix and Meta are down between 2.5% and 4.o%.

Stephen Innes of SPI Asset Management said that volatility in an already volatile market “underlines just how jittery markets have become”.

Innes said that the next question is if the markets can, or will, reflex in order to convince anxious traders to be confident enough to re-enter the market.

However, the Financial Times reports that, according to analysts at the financial services firm Nomura, the fall in the market has been a shock to most traders and this volatility is driven by a small group of anxious (and wealthy) traders who sought a hurried exit.

Separately, it reports that Japanese asset management firm Arcus Investment believes there is “no rationale” for the current drop in the Nikkei.

Includes reporting by Press Association and © AFP 2024.