Update: The British FTSE 100 has reached a new six-month close.
The blue-chip index just closed 80 points lower at 7,067, down 1.1%.
Fears of recession have dragged the market down, with mining companies and financial stocks leading the way.
It's time for a quick summary
Financial markets remain volatile today as fears of an economic downturn have hit stock prices and boosted bond prices to new highs.
Shares have fallen sharply in parts of Asia, with Australia experiencing its worst day of 2019.
In London, the FTSE 100 dropped to its lowest level since late February – up 80 points during the pixels, with mining companies and banks among the top competitors.
European markets have also reached six-month lows, as there is growing concern that Germany may slip into recession (it contracted in the last quarter).
The bond yield curve in America turned for the second consecutive day, with 10-year government bonds trading at a lower yield than 2-year bonds. Some experts see it as a clear warning sign of a recession, though others disagree.
Retail sales have beaten expectations both in the UK and in the US, allaying some fears of a delay.
After a nervous start, the Dow Jones industrial average rose 60 points – down 800 points at a worrying sale yesterday.
The US-China trade war has erupted again. Beijing has frightened investors by announcing it will impose countermeasures in response to America's $ 300 billion tariffs on Chinese goods. But officials also spoke about the mid-US meeting in search of a deal.
But Donald Trump insisted that any breakthrough would be on Washington's terms.
He also participated in protests in Hong Kong:
After its worst day of 2019, Wall Street has just opened cautiously.
Core stock indices are slightly lower, with traders keeping their dust dry while the recession is worrying.
The Dow Jones industrial average fell 28 points, or 0.1%, after falling 800 points on Wednesday (its fourth-highest point loss so far, though much less dramatic in percentage terms).
Technology stocks are also weakening a bit, pushing the Nasdaq a little lower (like the Dow, it lost 3% yesterday).
Trump: China needs to handle our conditions
Newsflash: Donald Trump has already strained, saying the US-China trade deal was made "on our terms".
This is repulsed by Beijing's call for a halfway compromise.
Lori Kalvashina, head of the US stock strategy at RBC, thinks Trump is too ambitious.
Given the clashes in Hong Kong, Beijing cannot afford to look weak in trade, she told Bloomberg TV.
Less good news: US factory output fell 0.4% in July, new data show.
This is slightly worse than expected and is expected to gain 0.6% in June.
This may be a sign that US manufacturers are struggling.
Mohammed A. El-Erian, chief economic adviser at insurance giant Allianz, dismissed talk that America could target a recession as "stupid."
But he also warns that stock markets will be more volatile in the coming months, although the strength of consumer spending in the US may isolate the US economy from problems abroad.
Here's a clip from CNBC:
Retail sales in the US are stronger than expected, soothing the nerves
Only in: US retail sales were stronger than expected last month, allaying fears of an impending recession.
US buyers spend 0.7% more in July than in June, beating expectations of 0.3% growth.
Like in the UK (see earlier post), online shopping has given a big boost – again Amazon Prime Day is a likely cause.
It is difficult to keep track of all maneuvers in the US trade war.
But to the benefit of Chad Brown of the Peterson Institute, he explained America's latest move – to impose higher tariffs on clothing, footwear and technology products made in China:
Wall Street is not yet open, but the futures market is quite bustling – plagued by worries about the recession and tensions in the trade war.
China: I hope to meet the US in half
Newsflash: China has already made some more conciliatory comments about the trade war with the US.
The Treasury says it hopes to meet America "halfway" to resolve the dispute, and that its presidents and Trump are contacted through phone calls and letters, as well as at their recent G7 summit .
This helps markets recover some key positions – Europe's stock markets are again slightly higher and Wall Street is set to rebuild some of the land. What a day!
How can China avenge its latest US $ 300 billion tariffs on exports?
He can't just answer in kind. China purchased $ 120 billion worth of goods from America alone in 2018 and has already imposed tariffs on them in response to earlier US sanctions.
Beijing could I suppose it will raise its existing tariffs, but that would hurt Chinese consumers and companies (who would pay the tariff).
Instead, politicians can use non-tariff measures. This may allow the yuan to reduce or deny American purchases entirely for the benefit of other countries (Brazilian soybeans, anyone?).
The nuclear option, as Eleanor Craig points out at Saxo Bank, would be to stop buying US government debt. This would shake the markets as China was such a huge buyer of American treasures.
Ironically, such a move could lead to a decline in US debt prices, pushing up yields and ending the inversion of the yield curve …..
Oil continues to slide today, hit by fears of a global downturn.
Brent crude dropped 2.5% to just over $ 58 a barrel.
It was already a rough day in the markets, even before China increased the tensions in the trade war:
Hold on to your hats, people. The Dow Jones industrial average is now slanted to lose more than 200 points at the start of trading, down 0.8%.
This is at the top of yesterday's 800 point slide.
August was a great month for the markets, and we're only halfway through it!
The British FTSE 100, for example, has fallen by over 7% in the last two weeks – from 7,586 points to just 7028 at the moment (down another 120 points today!).
Footsie is still 5% this year, so it's not catastrophic. Plus, August is known for volatility (liquidity is lower as investors rest).
Fund manager Brent Carlisle believes the threat from China is in response to Donald Trump's decision to delay tariffs on consumer goods manufactured by China until December.
This discount is intended to prevent US consumers from raising prices before Christmas – but it may also look like a weakness for the White House.
A little bit. Shares in the European banking sector are down 1.2%, reaching their lowest level since 2012, when the euro area debt crisis is raging.
Mining companies are among the best supporters in London, dragging the market deeper into the red.
The FTSE 100 is down 92 points at 7056, its lowest level since the end of February.
Anglo-Americans are 5.7% and Glencore have lost 4.5%. Demand for coal, copper and iron ore will decline if the trade war leads to a global downturn.
Financial stocks also suffer from recession fears, with Royal Bank of Scotland and Standard Life Aberdeen losing 3.5%.