Global Markets Slide, S&P Futures Back Under 3000 On Oil Chaos, China Slowdown -Zero Hedge
"On the 11th anniversary of the Lehman default, global stock markets and US equity futures are broadly lower after this weekend's drone attack on Saudi oil facilities resulted in the biggest oil price surge in history.
State energy producer Saudi Aramco lost about 5.7 million barrels a day of output on Saturday after 10 unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s second-largest oil field in Khurais....Iran-backed Houthi rebels in Yemen claimed credit for the attack, but President Trump has already said that the US is 'locked and loaded depending on verification' that Iran staged the attack, an assertion also made by his secretary of state Mike Pompeo and backed by administration officials....'We have never seen a supply disruption and price response like this in the oil market,' said Saul Kavonic, an energy analyst at Credit Suisse Group AG. 'Political-risk premiums are now back on the oil-market agenda.' The shock collapse in Saudi oil output pushed S&P futures back under 3,000 and yields on 10Y Treasurys down 8bps to 1.81%, while the dollar shortage has returned, sending the Bloomberg Dollar index to session highs. Adding to the downward pressure on risk assets was the latest dismal news from China which saw the country's economic slowdown deepen in August as core data missed across the board and industrial production tumbled to its weakest 17-1/2 years as reported last night....On Sunday night, President Trump tweeted there is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack and under what terms to proceed, while he tweeted that there is plenty of oil and suggested it is fake news he is willing to meet with Iran without conditions."