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T3's Take 3: Stocks Get Smacked on Weak Chinese PMI Data


Today's financial recap and tomorrow's financial outlook.

Today on T3 Live

T3 Live cordially invites you to our first annual Finance Festival, scheduled for November 6-8 in sunny Miami, Florida.

Scott Redler will be speaking about trading and technical analysis, and he'll be joined by a truly impressive team of Wall Street experts, including Barry Ritholz, Nicole Sherrod, Evan Lazarus, Doug Robertson, Josh Brown, JC Parets, and many more.

We've even booked a good old-fashioned bull vs. bear debate between Jeff Saut, Chief Investment Officer of Raymond James, and John Mauldin, founder of Mauldin Economics.

Read about the event here.

World Equity Markets

China's PMI fell at its fastest pace in more than six years in August, setting off another slaughter in global equity markets.

The Shanghai Composite plunged, closing down 4.6%. The Nikkei fell 3.0%, and the Hang Seng dropped 1.9%.

European stocks followed suit. The DAX, CAC, and FTSE all tumbled about 3%. While the situation is China was a major factor in the drop, two other factors were at play: oil and Greece. Greek Prime Minister Alexis Tsipras had resigned from his position yesterday and called for a September snap election, dramatically increasing uncertainty.

US markets weren't spared with the situation overseas and oil weighing on sentiment.

The S&P 500 closed down 3.2%, finishing well below the 2000 mark at 1970.95, right on the lows of the day. 

The NASDAQ fell even more. It dropped 3.5% as index leader Apple (AAPL) fell 5.9%. Other major tech names like Facebook (FB) and Netflix (NFLX) also suffered substantial losses.

The VIX jumped a whopping 47% to 28.2  as traders aggressively bid for downside protection. It was as low as 13 earlier in the week.

Oil Slump

Oil prices hit an eight-week losing streak, the longest streak of declines since 1986. Futures fell below the $40 a barrel for the first time since the financial crisis. Weak economic data in China drove concerns about demand from investors, who are simultaneously concerned about oversupply conditionss

Also, OPEC reported oil production at 32 million barrels a day. The group's output ceiling is supposed to be 30 million barrels a day.

Small Cap Biotechs Fight Back

Small cap biotechs managed to rally today, pushing SPDR S&P Biotech ETF (XBI) up 0.2%. The rally was driven by names like Raptor Pharmaceuticals and Xoma (XOMA), as well as La Jolla Pharma (LJPC), which rallied 15% on no news.

The IBB ETF, which is primarily composed of big caps, fell 3.1%.

Monday's Financial Outlook

US economic news for Monday will include the Chicago Fed Nat Activity Index and the Markit Manufacturing PMI.

Overseas economic data will include Markit German manufacturing PMI.

(TOUR) will announce earnings before the open on Monday. 
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