1. A global sell-off is underway Monday, with Japan front and center. Too much leverage in Japan? Its Nikkei 225 dropped 12.4% for its worst day since “Black Monday” in 1987 and entered into a bear market. Crypto is not acting like a safe-haven asset, as bitcoin tumbled 13% and at one point dropped below $50,000 each for the first time since February.
2. In the U.S., mega-cap tech names including Amazon, Alphabet and Microsoft are tracking for steep declines at Monday’s open — as are the major stock indexes. Futures for the tech-heavy Nasdaq 100 were down more than 5%. Questions about return on investment for AI spending are now being paired with fears about the health of the U.S. economy. Still, are these kinds of declines justified? The VIX index, often called Wall Street’s fear gauge, more than doubled Monday to over 52, reaching levels last seen during pandemic-related volatility in 2020. That’s too high.
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