FTSE 100 falls continue after sell-off on Wall Street and Asia – business live

European markets head lower as UK trade, construction and manufacturing figures present mixed picture 1.55pm GMT It may be too early to buy the dips, and more wild swings are possible, sayd Jasper Lawler, head of research at London Capital Group:US benchmark share indices falling into correction territory (down over 10% from record highs) has ignited concern the bull market has ended. There has been a spike in volatility, which has resulted in a blow-up in low-volatility strategies and a sharp dive in negatively correlated US index ETFs. The question is whether this is the technical trigger for wider market contagion or just a long overdue “healthy” pullback for an over-extended market.We would make the point that the stock market can deviate massively from economic fundamentals in the short term. Fear of rising bond yields can easily produce a bear market (down 20% from 52-week highs) despite a healthy global economy. In fact, that is usually how it happens because the stock market is a future-discounting mechanism. Another argument for a bigger move lower is that much of what has helped keep the stock market moving higher is momentum, which is now reversing. We would liken the outlook for the US stock market to making a tackle in sports, “the bigger they are the harder they fall.” 1.47pm GMT Here’s a reminder of the falls we’ve seen through the bull market, from analyst Barry Ritholtz:Memory is famously short during bull markets. There have been a bunch of corrections in this one https://t.co/u7YxBFEvhs via @gadfly pic.twitter.com/beKn1Kh2TJ Continue reading…
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