Dow drops 500 as macro worries intensify

WED, OCT 02, 2019

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF WED, OCT 02, 2019 • 11:57 ET

DJIA		26087.54
		-1.83%	-485.50

S&P 500		2890.01
		-1.71%	-50.24

NASDAQ		7780.58
		-1.62%	-128.10

EDITOR'S NOTE

It feels like we're gonna be stuck in one of those periods when all the data "surprises" to the downside for awhile, given that we surprised to the upside for most of the summer.

After yesterday's awful ISM manufacturing survey, comes this morning's ADP payroll report. It wasn't terrible, but it was a miss--ADP says the private sector added 135,000 jobs last month, a shade below the market's expectation, and a big drop from the 195,000 gain in August that was also revised down to 157,000 jobs added.

That was enough to heighten the anxiety hanging over global markets since yesterday morning's ISM report. Europe was already in the red, and the selloff intensified into the close there with Britain's FTSE 100 down more than 3%--its worst day in almost four years--in part because of separate Brexit drama playing out there today.

There was also the news overnight of North Korea launching a ballistic missile hours after agreeing to talks with the U.S. But the main focus for this market for now is going to be the U.S. economic data, especially if it keeps missing to the downside.

Tomorrow we get the ISM non-manufacturing survey, and Friday, the biggie: the "official" Labor Department jobs report for September. If that's a big miss, watch out below--we'll probably price in rate cuts to zero by the end of the day.

Meanwhile, here's the CEO of homebuilder Lennar from their earnings conference call today: "Current market conditions are strong and they've been continuing to improve." Strong! And continuing to improve.

I will keep making the same point ad nauseum: until we break out of the economy's current 1.5-2% trend, markets will keep gyrating between "the world is ending" selloffs and "the coast is clear!" rallies. We're stuck in the dreaded "40% recession" zone, where we'll remain plagued by "recession worry" headlines--like we have been for over a year now--and there's still no actual downturn.

It's gonna be a long month! See you on the telly at 1 p.m...

Kelly

P.S. I've been wanting to get to this red meat story all week. I just need these markets calm down!!

Kelly Evans
@KellyCNBC

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