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A gauge of stocks worldwide posted an eighth straight decline on Monday as investors ignored Trump administration attempts to reinforce confidence and the U.S. president called the Federal Reserve the “only problem our economy has.”

Investors, also facing the likelihood of a prolonged U.S. government shutdown, fled to the relative safety of bonds and gold during the first day of a week of trading shortened by the Christmas holiday.

Oil prices, meanwhile, tumbled more than 6 per cent on Monday to the lowest in over a year.

On Sunday, President Donald Trump’s Treasury secretary responded to the ongoing selloff by calling top U.S. bankers and said he would convene a group of officials known as the “Plunge Protection Team.”

“There are a whole number of factors that have triggered this latest risk-off climate, including the Fed’s very modest deviation from its (rate increase) plan and the government shutdown in the United States,” said Investec economist Philip Shaw.

“We may get some clarity on several factors in early 2019, starting with a clearer line of sight on the prospect for a resolution in U.S.-China trade dispute, but until then, there are some nerves.”

MSCI’s world equity index, which tracks shares in 47 countries, was 1.57 per cent lower and down 8 per cent over the past eight sessions. The index touched its lowest since early 2017.

U.S. stocks have fallen sharply in recent weeks on concerns over slowing economic growth and efforts by the U.S. Federal Reserve to tighten monetary policy, with the S&P 500 index on pace for its biggest percentage decline in December since the Great Depression and on the cusp of confirming it is now in a bear market. The Nasdaq has fallen nearly 22 per cent from its Aug. 29 high.

Trump on Monday blasted the independent U.S. central bank, saying on Twitter that the “only problem our economy has is the Fed. They don’t have a feel for the market.”

Meanwhile, the U.S. Senate has been unable to break an impasse over Trump’s demand for funds for a wall on the border with Mexico, and a senior official said the resulting government shutdown could continue into January.

U.S. stocks followed broad indexes in Europe and Asia lower on Monday, with markets in Germany and Italy closed.

The Dow Jones Industrial Average fell 653.17 points, or 2.91 per cent, to 21,792.2, the S&P 500 lost 65.52 points, or 2.71 per cent, to 2,351.1 and the Nasdaq Composite dropped 140.08 points, or 2.21 per cent, to 6,192.92.

“Markets (are) still under pressure from last week’s more hawkish Fed update, exacerbating fears about slowing growth and more expensive refinancing following years of stimulus,” said Mike van Dulken, head of research at Accendo Markets.

Canada’s main stock index also fell on Monday, weighed by losses in energy companies and as investors fled riskier assets to take refuge in gold amid worsening global economy.

The Toronto Stock Exchange’s S&P/TSX Composite index was unofficially down 155.25 points, or 1.1 per cent, at 13,780.19. The index was down for its fourth straight session and fell to its lowest level in over two-and-a-half years.

Nine of the index’s 11 major sectors were lower, with energy sector leading losers by shedding 3.2 per cent as oil prices dipped. Encana Corp was down 5.4 per cent, while Canadian Natural Resources Ltd. dipped 4.3 per cent.

The materials sector, housing precious metal miners, added 1.7 per cent after the price of gold rose as global growth fears boosted the appeal of the metal viewed as a safer bet. Kinross Gold Corp. jumped 7.4 per cent, while Goldcorp Inc. rose 5.3 per cent.

Last week, the S&P 500 suffered its biggest weekly percentage drop since August 2011, while the Dow had its biggest weekly drop since October 2008.

All 11 S&P 500 sectors ended in negative territory on Monday, meaning they were all in negative territory for the year.

Roughly three-fourths of the S&P 500 was trading in bear market territory.

All 30 components of the Dow industrials also finished in the red on Monday.

For the third straight day, more than 2,600 New York Stock Exchange- and Nasdaq-listed stocks were hitting 52-week lows, reflecting a depth of selling the market had not experienced since the height of the financial crisis a decade ago.

Mnuchin spoke on Sunday with the heads of the six largest U.S. banks, who confirmed they have enough liquidity to continue lending and that “the markets continue to function properly.”

But investors said his move to convene a call on Monday with the President’s Working Group on Financial Markets, commonly as the “Plunge Protection team,” may have weighed on investors on Monday. “When the Dow is down 600 points, it’s hard to say it was a positive,” said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago.

“Although his intention was a very good one, the net feeling I think was, ‘Is there a bigger problem that we don’t know about?” he said. Aside from Mnuchin’s move, Trump’s budget director and chief of staff, Mick Mulvaney, on Sunday said a partial U.S. government shutdown could continue to Jan. 3, when the new Congress convenes and Democrats take over the House of Representatives.

The stock market closed at 1 p.m. EST ahead of Tuesday’s Christmas holiday.

Give the extremely restricted liquidity at this time of year, Pande said, “any selling here will beget a very large decline.”

In Christmas holiday-thinned half-day trading in Europe, France’s CAC 40 fell 1.5 per cent, while the FTSE 100 index of leading British shares slid 0.5 per cent. Germany’s DAX was closed.

Major indexes in Asia finished mixed. South Korea’s Kospi dropped 0.3 per cent, while Hong Kong’s Hang Seng lost 0.4 per cent on a short trading day. Australia’s S&P ASX 200 added 0.5 per cent. Markets in Japan and Indonesia, which is reeling from a weekend tsunami that has killed at least 373 people, were closed.

Oil prices plunged more than 6 per cent to the lowest in more than a year on Monday, pulling back sharply late in the session as fears of an economic slowdown rattled the market.

U.S. crude futures and global benchmark Brent fell to the lowest since the second quarter of 2017 during the session, putting both benchmarks on track to lose about 40 percent in the quarter.

“What’s happening in the stockmarket is raising fears that the economy is grinding to a halt and thereby will basically kill any future oil demand,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “They’re pricing in a slowdown in the economy if not a recession, with this drop.”

The price decline during the quarter is likely to cause producers to throttle back on their output, he said.

U.S. crude futures have hit the lowest since June 22, 2017, as jitters have grown about the impact of an escalating U.S.-China trade dispute on global growth and crude demand. Brent crude is at its lowest since Aug. 17, 2017.

Markets across asset classes have come under pressure as a U.S. government shutdown intensified growth concerns. Investors have flocked to safe-haven assets such as gold and government debt at the expense of crude oil and stocks.

A gauge of stocks worldwide hurtled toward an eighth straight decline on Monday as investors ignored the U.S. Treasury secretary’s actions to reinforce confidence in the economy and U.S. President Donald Trump criticized the Federal Reserve as “the only problem our economy has.”

The U.S. Senate has been unable to break an impasse over Trump’s demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3.

U.S. crude futures settled at $42.53 a barrel, down $3.06 or 6.7 per cent in the session. Brent crude futures settled down $3.35, or 6.2 per cent at $50.47 a barrel. The market settled early ahead of the Christmas holiday.

Brent fell 11 per cent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent for the quarter.

The macroeconomic picture and its impact on oil demand continue to pressure prices. Global equities have fallen nearly 9.5 percent so far in December, their biggest one-month slide since September 2011, when the euro zone debt crisis was unfolding.

Reuters and The Associated Press

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 3:57pm EDT.

SymbolName% changeLast
CNQ-T
Canadian Natural Resources Ltd.
+0.87%103.33
G-T
Augusta Gold Corp
+6.93%1.08
K-T
Kinross Gold Corp
+3.88%8.31

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