Nasdaq down 3pc, bond yields sink

NEW YORK: Global equities sold off on Friday and US Treasury yields were at multi-month lows on concerns about the economy and downbeat forecasts from Amazon and Intel, which hit richly-valued technology firms.

The Nasdaq Composite index fell 3.0 per cent on Friday, putting it on track to confirm it is in a correction following worries about pricey Big Tech valuations and as weak employment numbers aggravated worries of a slowdown.

Tom Plumb, chief executive and portfolio manager at Plumb Funds, said, “This is an old fashioned correction going on and it’s obviously not something that anyone anticipates the moment it starts, or even when it’s going (to) end, but it’s just not that unusual as we passed the economic torch from the perception of growth to the perception of needing government intervention with lower interest rates to stabilize the economy.”

“As we go through the fall and we start to see some impact of the Federal Reserve taking actions (in terms of rate cuts), we can see a recovery from the 16,600 levels right now to well over 18,000 by the end of the year.”

Claudia Sahm, chief economist at New Century Advisors and former Fed economist, said: “The Fed, because it hasn’t started to normalise yet, has a lot of room to step in and take some pressure off the economy. This is not a crisis moment. We still have a strong economy, it’s just slowing in a way that needs to get under control. Given that (the Fed) has been slow to start their interest rate reductions, doing some catch up in September could make a lot of sense. They’re going to want to be -- appropriately so -- deliberate in their actions.”