Wall Street starts new week deep in negative territory
|- Falling Treasury bond yields weigh on financial shares.
- CBOE Volatility Index (VIX) rises more than 8%.
- Defensive sectors stay flat in early trade on Monday.
Wall Street's main indexes started they da deep in the negative territory as hinted by the sharp fall witnessed in the S&P 500 Futures. As of writing, the Dow Jones Industrial Average was down 0.67% on the day while both the S&P 500 and the Nasdaq Composite were erasing 0.7%.
The risk-off atmosphere, as reflected by the more than 8% increase in the CBOE Volatility Index (VIX), is pushing the yield on the 10-year US Treasury bond yields lower and hurting the rate-sensitive Financials Index, which was last down 1.5% on the day. Furthermore, the dismal demand outlook keeps the bearish pressure intact on crude oil prices, causing the Energy Index to erase more than 1% in the first hour of the week. On the other hand, the defensive Real Estate and Utilities indexes stay flat.
Earlier today, Moody's noted that the United States' labelling of China as a currency manipulator was likely to escalate the trade tensions and could be credit negative for the US. Meanwhile, China's central bank for the third session fixed the USD/CNY above 7 to revive concerns over a currency war.
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