Reply #17: Stocks, U.S. Futures Decline on China; Treasuries, Yen Rally

[ozymandius]

Looks like money is seeking shelter in Treasuries. - ozy

June 29 (Bloomberg) -- Stocks and U.S. index futures plunged, Treasury two-year note yields dropped to a record low and the yen strengthened on concern that growth in China, the main engine of the world’s economic recovery, is slowing.

The MSCI World Index of 24 developed nations lost 1.3 percent at 12:24 p.m. in London, driving the yield on the benchmark 2012 note to 0.586 percent and the 10-year yield below 3 percent for the first time in 14 months. China’s Shanghai Composite Index slumped 4.3 percent, the most in six weeks, and futures on the Standard & Poor’s 500 Index slid 1.4 percent. The yen appreciated to an eight-year high against the euro.

“If the bond market is correct then this recovery could be dead in the water,” said Jim Reid, the head of fundamental strategy at Deutsche Bank AG in London.

The Conference Board’s leading economic index for China, which overtook Germany as the world’s biggest exporter last year, rose 0.3 percent in April, less than the 1.7 percent reported June 15. The data damaged investor confidence amid concern a Labor Department report July 2 will show the U.S. lost jobs for the first time since December while European banks’ balance sheets come under renewed scrutiny.

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aSNYSfcM9DA4&pos=1

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There has been huge movement in bonds. Seven basis points of decline for 10-year T-note is huge in the bond world.