‘The Game is Officially Over, Kids’: In 8 Days, Global Markets Lost 4 Trillion Dollars

Global markets stumbled on Tuesday for the fourth consecutive day. Fear coupled with nervousness over the tightening monetary policies of the FED and ECB has wiped out 4 trillion dollars from global exchanges in the past eight days, according to Reuters.

Major European exchanges ended the day in the “red” by about 2.5 percent, while indications for tomorrow’s trading on Wall Street suggest further turbulence as the “fear index” is at its highest levels since the unexpected and sudden devaluation of the Chinese currency in 2015.

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Faced with alarming headlines and analyses, investors rushed into traditional “safe havens” such as gold and the dollar. The commodity market has been gloomy for days, where the value of oil and industrial metals has plummeted after a strong and encouraging start to the year.

“The game is officially over, kids,” commented a Rabobank analyst to Reuters. “The rising turmoil painfully reminds some investors that one-way bets do not exist.”

The seriousness of the situation is evidenced by the European volatility index (STOXX volatility index) which measures investor anxiety in the market. It jumped on Tuesday to levels not seen since September 11, 2011, the date of the terrorist attacks on the U.S.

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“This is not the end for the bull market, but it is the end of the low volatility regime,” commented David Lafferty, Chief Market Strategist at Natixis Investment Managers.

“The last two days of trading have thrown a giant bucket of cold water on the period of short-term turmoil and I think we are facing an extended period of heightened volatility in general.”

However, not all analysts are dissatisfied with the current movements, and some believe it is a necessary correction of inflated markets.

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“I think this is a healthy, albeit painful correction (in the capital market) and we could see more of it during the next week, but if you take everything that is happening into account, I really wouldn’t panic,” said David Govett, a broker at Marex Spectron, which trades in precious metals.