Dow futures off 700 points; Nasdaq futures fall 5%, go limit down

[brooklynite]

Source: CNBC

U.S. stock index futures screamed lower on Monday, with Dow futures briefly tumbling more than 700 points, as fears surrounding the health of China's economy multiplied.

The Dow futures held about 650 points lower, with the S&P futures off about 70 points, and the Nasdaq 100 futures off about 5 percent.

These concerns saw the benchmark Shanghai Composite index notch up its biggest one-day percentage loss since 2007 on Monday, closing down 8.5 percent.

Read more: http://www.cnbc.com/2015/08/24/wall-street-prepped-for-meltdown-as-futures-plunge.html

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"Fasten your seat belts, it's going to be a bumpy night"

[still_one]

1. This is is going to probably be the capitulation day or week, and I suspect it will start to

stabilize within a week. Let's face it, the market has been going up non-stop for quite some time without any meaningful correction.

This rout might technically push the market into a bear market, but regardless, I doubt the feds are going to raise interest rates now in September.

The question is will this be a short sharp decline, or will it be a long drawn out affair. If it is a long drawn out downward trend, it will have impact on the economy.

[Adrahil]

13. But this is being largely driven by China.

U.S. fundamentals do not look bad. I suspect we'll stabilize this week. But I think China might take it in the gut for a bit. Their system is a bit unstable.

[still_one]

21. We are on the same page. However, I think the concern is that the Chinese melt down will carry over

into our markets

[yellowcanine]

2. I don't know what will happen but someone is going to lose a lot of money if the market

goes up today. We may be due for a correction of the correction.

[harun]

3. Yeah, might be a suckers sell rally.

[Warpy]

27. We were overdue for a correction

but this is looking like a bunch of inner circle fat cats hitting the panic button. In most sell offs, day 3 would bring out the bargain hunters. Today, it's down another 350+ although it has rallied from a >500 points down earlier.

I doubt this has run its course. The market has been hyperinflated and flat for months.

[mahatmakanejeeves]

4. Your shares of AAPL are off a bunch, but

considering what you paid for them, I don't think you're complaining much. My shares of AAPL, too, but I paid a lot more for them than you did. Water under the bridge.

I had a limit order in place to buy (something else). I cancelled it and put in another at a much lower price.

There's a bottom here somewhere, but I've lost a lot of money in the past thinking that I had found one.

Fasten your seatbelts -- oh, you already said that.

Best wishes.

ETA, just after noon. Shares up AAPL are up now. It's the only green ink on an otherwise red page.

[Fred Sanders]

5. When oil goes to record highs it is a disaster for the energy hungry economy...same when it goes down???

Never can figure that one out.

Capitalists and billionaires losing a fortune.....I can still sleep at night!

What do you say about the market hypocrisy on oil prices?

[brooklynite]

7. Also Union pension funds...

nighty night.

[Fred Sanders]

9. Union pension funds, like all employee or national pension funds, pay little heed to daily or weekly or even monthly

fluctuations in the stock market and are not usually all that heavily invested anyway....I know my pension plan is very diversified.... not so much in American stocks!

I do not weep for the losses of the wealthy on the stock market...isn't that kind of a widely held sentiment at DU?

[brooklynite]

22. ...as do the investments of most wealthy investors...

Unless they're investing in exotic instruments or futures contracts they're perfectly able to ride out the storm. It is in fact the institutional investors that tend to have "trigger" instructions that might have them cash out at the wrong time.

In any event, there's no good reason to wish financial loss on anyone.

[Adrahil]

16. Well, keep in mind a lot of middle class folks are in the market too.

But oil prices are more complex than that. If oil prices are driven up by supply/demand issues, then yeah, that is going to impact the economy. In this case, the prices for oil are dropping on both the higher supply (OPEC has lost some cohesion), but the plummeting oil prices are being driven by reduced demand in China, in particular. So long as U.S. Fundamentals remain firm-ish, the lower oil prices will help boost U.S. economic activity. Also, keep in mind that China looking unstable may encourage U.S. companies to invest more HERE. That has not been the case for a long time. The down side, of course, is that a lot of U.S. companies have seen a lot of their own growth in China, and that's about to come to a screeching halt!

[corkhead]

6. "Remain Calm" "Don't do anything hasty"

Stand pat to give the oligarchs and banksters time to get their money out.

You're welcome.
Love,
CNBC

[n2doc]

10. News Flash: The smart money is already out, or on the short side

By the time the general public panics they are already one step ahead. China has been going down for many months. The poor economic indicators for China manufacturing have been there for many months.

[StoneCarver]

24. You're right. If more people on this page read Bill Gross

two months ago they would have already been out. Actually he said, "take some money off the table". I decided to take it all off. It's a butterfly thing in my stomach. It worked in 2008 too. I try and listen to the whispers of intelligent people who are unassuming. "He who says does not know, and he who knows does not say". You can bet the farm on that!

The markets are still overvalued and will decline more until they are fairly valued -DOW ~13K. Oh, and the Fed will raise interest rates in September. Why? Because 0% at the discount window has been and is distorting the markets and traders/bankers are betting with 'free' money -because there is no interest penalty. Even a low interest rate will bring discipline back to the markets. It's tough medicine but it has to be done -sorry, time to take away the punch bowl. The rides not over by a long shot. But it will calm down in a few months, then make your move. (The advice above is worth what you paid for it.)
Stonecarver

[Psephos]

25. the smart money was never in

The stock market is a sucker's carnival that is manipulated by both bankers and government, one for maximum profit, the other for maximum political advantage. They most assuredly work together.

If you're at a poker table and can't figure out who the mark is, then you are the mark.

[Johnny2X2X]

8. Took a loan out on my 401K

I had some emergency expenses late last year and had to take out a loan from my 401K, I'm paying myself back at 3% interest. Now I would never recommend taking out a loan from your 401K, it was truly the last resort for me, however, the few grand I took out are not subject to these huge losses right now.

[mahatmakanejeeves]

11. Here's why David Rubenstein owns a Magna Carta and you do not.

Hedge Fund Gains $100 Million in Two Days on Bearish China Bet

Markets | Financial Services | Hedge Funds

Surge enables ESG’s Nexus Fund to recover from losses earlier in year



David Rubenstein is co-CEO of Carlyle; a fund bet against China’s yuan. Photo: Jacob Kepler/Bloomberg

By Juliet Chung
[e-mail]

Updated Aug. 21, 2015 8:18 p.m. ET

A Carlyle Group LP hedge fund that anticipated a sudden currency-policy shift in China gained roughly $100 million in two days earlier this month, a sign of how some bearish bets on the world’s second-largest economy are starting to pay off.

The 75% return for Emerging Sovereign Group’s Nexus fund developed after China unexpectedly pushed the value of the yuan lower on Aug. 11, according to people familiar with the matter. It was the nation’s biggest devaluation in two decades.

The sudden paper gains propelled the ESG hedge fund to a roughly 50% year-to-date return through mid-August, after fees. The surge helped the fund recover from losses earlier in the year. Through the end of July, it had lost 11%, one of the people said.

China has become an increasingly popular target for short bets that asset values will deteriorate. But limited foreign access to the country’s equity and bond markets means there aren’t many ways to bet on outright declines in those markets, and the methods that do exist tend to be small and illiquid. ... Nexus, led by former fixed-income salesman Brian McCarthy, instead focused on betting against China’s currency. The fund purchased a string of put options that gave it the right to sell the currency at preset prices, within agreed-upon time frames. Nexus was able to buy those options on the cheap over time because most investors expected Beijing to support the yuan rather than let it fall.

[Fred Sanders]

14. Gamblers alway boast about their winnings while silent about the loses...bet they lost a lot

more on the American stocks and equities than they gained on China currency speculation!

[Adrahil]

18. Perhaps true....

But the rich have continued to gather more and more of their wealth to themselves. The market is one way that happens.

[Fred Sanders]

20. I used to invest in the stock market until long ago I realized it was little more than a

place for corporations and capitalists to launder their money while giving the illusion to retail players that there IS a level playing field and not a casino for the bored wealth and uber-wealthy who will still eat and live very well through any paper losses. Paper losses that are real losses for anyone else.

If you really want a great chance of making money you have to have millions to join the club.

Retail investors are the pigeons and the camaflauge for the whole operation.

I recall how one hedge fund cornered the aluminum ingot market, storing huge quantities in warehouses for no other reason than to control prices, while others joined with brokers and banks in a world wide criminal cabal to rig the Libor interest rates....stealing untold billions from working folk and business and governments around the world....what more evidence do folks need?

[matt819]

26. That's exactly my view

The 1%-ers are not suffering on this rollercoaster ride. They'll buy back in at the lower prices, and they'll come out ahead. You can be 110% sure of that.

And, yes, while there seems to be a driving force behind this turbulence - China - I wouldn't be surprised to learn that the major players have played their roles dutifully to exacerbate the chaos and come out ahead. Capitalism at its finest, I suppose.

[lonestarnot]

12. What's rule 48 or whatever, 40 something? :)

[Dawgs]

15. Great news for those that are in it for the long term.

Not so much for the few that are left.

[rdking647]

17. dow opened down 1000 points

currently down 600 or so

[Sunlei]

19. hope i have time to get on and look for a bargin :P

I just do it myself,play with the buy low and sell when the profit more then covers the cheap buy/sell fee, but it takes time! not sure what they call this kind of 'stock game'

[world wide wally]

23. Now, don't you wish that Social Security was tied to the stock market?