THAT investor extraordinaire Warren Buffet is sitting on more cash than ever - US$277 bil (RM1.22 tril) - after having disposed of almost half of his entire Apple stake which is worth over US$50 bil - has left the global investing fraternity wondering if the 93-year-old chairman of Berkshire Hathaway knows something that the financial world is unaware of.

Whether this is a tell-tale sign of a bear market or otherwise, US stocks - the bellwether of the global stock market - posted its worst session since 2022 on Friday (Aug 2) after a string of weak economic reports jolted investor fears that a recession may be brewing.

The tech-heavy Nasdaq Composite also fell into correction territory, down 10% from its peak reached in July of 18,647after it lost 2.4% to 16,776.16 on the day.

Back home, the benchmark FBM KLCI plunged more than 40 points to trade below its 2024 psychological 1,600-point mark in what is seen as its worst day in more than one year.

Mirroring this are other Asian stock markets with the Taiwan Capitalisation Weighted Stock Index having plummeted the most by 7% followed by South Korea’s KOSPI by 6%, Japan’s Nikkei (5%) and Singapore’s Straits Times Index (STI) (3%).

At the time of writing (11.45an), the FBM KLCI has nosedived 46.10 points to 1,564.95 with losers thumping gainers by 1,469 to 61 while 161 counters remained unchanged and 713 untraded.

The five top losers were Nestle (M) Bhd which erased RM1.50 to RM109.00; Malaysian Pacific Industries Bhd (MPI) (down RM1.04 to RM33.96); Fraser & Neave Holdings Bhd (down 90 sen to RM28.90); Dutch Lady Milk Industries Bhd (down 90 sen to RM29.10) and United Plantations Bhd (down 82 sen to RM25.38).

On Friday (Aug 2), all three of the major benchmarks fell over 1.5% with the Dow Jones Industrial Average, having tumbled nearly 1,000 points at mid-day before paring losses to end down over 611 points to 39,737.26 points (the Dow has peaked at 40,954.48 points as of July 14 this year).

Whether today’s sell-off is just a short-term glitch will largely depend on how global stock markets are able to absorb the slew of negative economic/financial data emanating from the US in the coming days with the ISM Services PMI (Purchasing Managers’ Index) and unemployment claims on Thursday to be closely watched.

Thus far, a paltry employment report which saw just 114,000 jobs created last month and an uptick in unemployment to 4.3% had fuelled Friday’s (Aug 2) sell-off. Growth has been on the decline since May.

Even so, the fourth straight jump in the US jobless rate has triggered by the so-called Sahm Rule (named after former Federal Reserve economist Claudia Sahm) which has successfully predicted every recession since 1970. - Aug 5, 2024 

https://focusmalaysia.my/us-recessionary-fears-spark-global-stock-market-sell-off-fbm-klci-dips-45-pts-below-its-16oo-pt-psychological-shield/