A very weak start for markets in Asia today after Wall Street and European shares fell heavily Friday night following the release of very poor jobs numbers for May for America.
On top of that there was more speculation about Europe with Hungary in the gun after some very incautious comments by a government official about the country’s financial health.
At the same time a report claimed a major French bank was having problems with financial derivatives, there was some success with the BP oil leak in the Gulf of Mexico and Japan got a new prime minister.
Commodities fell, with gold, oil and copper, plus wheat, all down.
US bond yields fell sharply as there was a rush of money out of risky investments and into US Treasuries ahead of the weekend and a meeting of G20 finance ministers in South Korea, which produced very little.
In New York forecasts for a very strong jobs month were horribly wrong.
The Labor Department said the US economy added 431,000 jobs in May – far short of the 513,000 that Wall Street had expected.
The unemployment rate dropped to 9.7% in May from 9.9% in April.
The fall was due to the number of people looking for work falling.
Just over 400,000 of the new jobs were in the Census for the next three months.
That means private employers added a net 21,000 new jobs, far below the 150,000 to 200,000 speculated upon by market forecasters.
The S&P 500 fell 3.4% to 1,064.88, below 1,070, which had been considered a support level for the market.
The index closed just below the intraday low the market reached during the so-called "flash crash" on May 6.
The Dow Jones Industrial Average sank below 10,000 and both measures closed at the lowest levels since February 8.
Oil fell 4.2% to $US71.51 a barrel, while tin shed fell nearly 10% to lead declines in metals.
Ten-year Treasury bond yields decreased 17 basis points (0.17%) to 3.2%.
Hungary’s forint plunged to an almost 15-month low against the dollar on concern Hungary may default.
As a result the euro slid below $US1.20 for the first time since March 2006 and the yen climbed against all 16 major counterparts.
The Aussie dollar lost just over 2 USc to close at 82.34 on Saturday morning in New York.
Sydney’s overnight Share Price Index contract lost 123 in overnight trading Friday, meaning our market could in for a very nasty start today.
Wall Street is now down more than 12.5% since the April 23 closing high for the year.
The Dow fell a massive 323.31 points, or 3.15%, to 9,931.97. The Standard & Poor’s 500 Index fell 37.95 points, or 3.44%, to 1,064.88. Nasdaq Composite Index tumbled 83.86 points, or 3.64%, to 2,219.17.
For the week, the Dow lost 2%, the S&P 500 fell 2.3%, and the Nasdaq dropped 1.7%.
Financial stocks also ranked among the worst performers, manufacturers and industrial shares were also hit Friday.
Further pressure on Wall Street came from fears about Societe Generale’s derivatives business.
But the bank said it would not comment on market talk about its derivatives operations.
BP’s US-listed shares fell 5.3% to $US37.16 as it partially capped the flow of oil from the well in the Gulf Of Mexico.
European stocks dropped on the back of the poor payrolls data.
National benchmark indexes fell in 12 out of the 18 western European markets. Germany’s DAX slipped 0.1% and France’s CAC 40 lost 1.7%, while the UK’s FTSE 100 eased 1.3%.
The Stoxx Europe 600 Index sank 1.8%, trimming the week’s advance to 0.2%.
It’s now down 10% from the high on April 15.
For the Friday, national benchmark indexes declined in all 18 western European markets, except Iceland.
The FTSE 100 dropped 1.6%, Germany’s DAX fell 1.9% and France’s CAC 40 fell 2.9%.
Austria’s ATX plunged 4.1% because many of its banks are heavily exposed to Hungary where there’s now doubt about the country’s financial situation, especially its banks.
That was after a spokesman for Hungarian Prime Minister, Viktor Orban, said the previous government "manipulated” figures and "lied” about the state of the economy.
That reminded investors about Greece and how the previous government fiddled figures and covered up the true state of the country’s debt.
In Asia it was another down day Friday and today isn’t looking much better.
The MSCI Asia Pacific Index lost 0.4%. It is now down 12% from the April 15 high and 5.8% from the start of 2010.
The Nikkei 225 Stock Average lost 0.2% in Tokyo where the Democratic Party of Japan chose Naoto Kan as its leader, making it likely he’ll become prime minister after Yukio Hatoyama announced his resignation.
Australia’s ASX 200 Index fell 1.1% on Friday, Shanghai’s Composite Index dropped 0.2%, but South Korea’s Kospi index added 0.1%.
Over the week Shanghai lost 3.9%, but Hong Kong’s Hang Seng was up 0.1% and the Nikkei was up 1.4%.
Australia slipped 0.2% over another volatile week.
The ASX200 index ended Friday down 36.6 points, or 0.8%, at 4449.4, while the All Ordinaries index was down 33.8 points, or 0.8%, at 4472.4.
Miners and banks were weak for most of the week.
