Markets are open in Asia, and they are deep in the red.
Japan's Nikkei is down 2.9%.
Korea's Kospi is down 1.4%.
Australia's S&P ASX is down 1.4%.
This follows an ugly U.S. trading session where the Dow plunged 326 points (2.0%) and the Nasdaq fell 106 points (2.6%).
In recent weeks, we've watched markets increasingly move in tandem in what's often described as "risk-on, risk-off."
"When good news (risk on!) comes across the wire, market participants are buying risky assets (like stocks and emerging-market assets) and sell safe-haven assets (like government bonds and gold),"explained BI's Matthew Boesler. "Conversely, on bad headlines (risk off!), market players are dumping risky assets and piling into safe havens."
On Tuesday, we learned that the ISM manufacturing index dropped to 51.3 in January from 56.5 in December. Economists were looking for a reading of 56.0. The new orders sub-index collapsed to 51.2 from 64.4.
So, risk off.
"We can say ignore today’s decline, it is due to inclement weather, but we really have to wait to see if the number bounces back after the weather warms back up in the next few months," said Bank of Tokyo-Mitsubishi's Chris Rupkey. "Manufacturing caught a cold this month, keeping our fingers crossed it is not the start of something more serious."
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