Updated throughout the day.
August 24
It’s a galloping global rout. The Dow plummeted 1,000 points at the open before halving the loss within minutes. The Dow clawed its way back up midday before falling again, closing the day down 3.6%, its lowest close in 18 months. The Nasdaq saw a similar plunge, climb, and fall, closing down 3.8%. And the S&P 500 did the same, closing down 3.9%. One out of five S&P 500 stocks flash crashed this morning. And more than 100 of the S&P 500 stocks traded a 10% or wider range in the first 20 minutes of the day. The CBOE VIX Volatility Index, aka the fear index, failed to open for more than an hour and then surged 83% to a terrifying 51.27. By close the VIX was at 12.71.
Here’s what else you need to know:
Atlanta Fed president says rates will rise this year. Dennis Lockhart says the factors contributing to growth now are complicated on the global scale, making it difficult to push for a rate hike in the U.S. Lockhart says he is “very disposed” to a September rate hike. Reuters
Jeffrey Gundlach is still concerned about the markets. The DoubleLine Capital co-founder says that the turmoil isn’t over yet. Corrections take more than a couple days, and the market is wounded. Gundlach says he’s concerned about China’s growth, as well as redemptions in risk-asset-based ETFs and mutual funds. Reuters
Koreas shake hands, hug. Well, not literally, but they did reach an agreement Monday to deescalate tensions. South Korea got the apology it wanted over the North’s military action that injured Southern soldiers, and the South says it will stop broadcasting propaganda at the North. CNN
Ferguson withdraws arrest warrants from before 2015. A Ferguson judge moved to make sweeping changes to the troubled Missouri town, starting by ridding it of arrest warrants issued before January 1. Pretrial release conditions will also change, allowing payment plans and community service as alternative penalties. CNN
Oklahoma politician stabbed to death. State labor commissioner Mark Costello was killed by in a restaurant. His 26-year-old son Christian has been arrested for the murder. Witnesses say the two men fought in the restaurant and then the parking lot leading up to the stabbing. The Department of Labor was closed today because of Costello’s death. The 59-year-old was married with five children. BBC
Apple recalls some iPhone 6 Plus phones. The company says a small number of the phones have faulty back cameras leading to blurry photos. The affected phones were mainly sold during September 2014 and January 2015. Check the Apple website to see if your phone is eligible for a new camera, or if you’re just really bad at taking pictures. Reuters
The day has been so bad it has earned a name: Bloody Monday. Chinese stocks stand at their lowest level in six months with only about 100 stocks listed in Shanghai still trading late. The other 993 stocks halted trading voluntarily or were forced to after the index hit the daily 10% limit.
- Nikkei 225: -4.61%
- Hang Seng Index: -4.8%
- ASX 200: -2.8%
- Kospi: -2.47%
- Straits Times Index: -3.36%
…and now the contagion has spread to Europe, with London’s FTSE 100 index opening 2.8% down. Meanwhile, Spain’s IBEX is down 3.3%, Italy’s FTSE MIB is down 3.5%, the Portuguese PSI 20 has shed 4.4%, and Germany’s DAX index is down 3%.
Euro surges to new highs. With oil undermining the British pound and ZIRP keeping the dollar fairly rooted, a surprising safe haven currency has emerged – the Euro. The oft-embattled currency posted some serious gains against most of its trading partners today, surging 0.75% against the pound and shooting as much as 0.93% versus the greenback. FXStreet
China Shenhua Energy gears up to tackle lower prices. In the midst of a righteous meltdown in commodities, state-owned coal giant Shenhua Group will see its listed subsidiary – China Shenhua Energy – cut its unit coal production costs as well as its “controllable” operating costs by 5% this year. SCMP (paywall)
ISIS blows up Palmyra temple. Islamic State militants have destroyed one of Syria’s oldest and important sites – the temple of Baal Shamin. It is the first time the group has damaged monumental Roman-era ruins. Reuters
Netflix teams up with SoftBank to take on Japan.While its attempts to break into China have so far been a bust, Netflix has just found a huge ally for its foray into Japan – Masayoshi Son’s giant SoftBank. The two have just announced that SoftBank customers would soon be able to sign up for Netflix through the bank’s website, call centers, and various shops with a subscription fee ranging between Y650 to Y1,450 per month. Wall Street Journal
You won’t believe this:
Ashley Madison hack possibly linked to suicides. Extortionists have taken advantage of the adultery website hack, attempting to blackmail people on the exposed subscribers list. The Toronto police say the such exposure may be linked to two suicides. Two Canadian law firms have filed a $578 million class-action lawsuit on behalf of the Canadians involved. Buzzfeed
Cops rough up rapper Khalifa for LAX hoverboard shenanigans. LA police are facing a storm of public protest after rough-handling Wiz Khalifa. The rap star was cuffed for riding his hoverboard Back to the Future-style through airport security. Now #NotResisting is doing the rounds in the Twittersphere. CNN
We guess pandas don’t do sonograms. A panda at the zoo in Washington, D.C., gave birth to a healthy cub. Then to the surprise of one and all, gave birth to a second cub five hours later. These are the first giant pandas born in the U.S. this year. Mashable
Photo: Jim Bowen