Dow slides as US stock market suffers worst week in two years - as it happened

Graeme Wearden and Nick Fletcher

from on 2018-02-02 21:44 (#3EX5P)

Worries over rising bond yields and inflationary pressures have hit shares this week.

Latest: Dow tumbles by almost 670 points
Worst week for US stock market in two years
US jobs report beats forecasts
Markets hit by bond market worries
Roubini: Bitcoin is biggest Ponzi scheme in history

9.43pm GMT

New York traders will be catching their breath and counting their losses after this week's declines.

Wall Street ended its worst week in two years on Friday with another sharp fall as markets in Europe also continued to tumble from the record-high levels reached less than a month ago.

Investors headed for the exits amid growing fears over a bond market rout, triggered by early signs of inflation in the US as economic growth accelerates and wages appear to finally be rising after years of stagnation. US government bond yields, which rise as prices fall, hit the highest level since January 2014.

9.41pm GMT

Bitcoin, incidentally, is still off its earlier lows. It's down 5% today at $8,556.

9.35pm GMT

The Dow finished 665.75 points lower. So it you round it down.....

Down 666? Uh oh. https://t.co/4uxMV15Q3Z

9.34pm GMT

Each of the 30 companies on the Dow fell today.

The worst performers were Chevron (-5.5%), Exxon (-5.1%) and Goldman Sachs (-4.5%).

9.24pm GMT

What caused the selloff?

There are several factors, but the most significant may be today's jobs report - showing wages rose by 2.9% over the last year. That increase in earnings could push up inflation, forcing US interest rates higher.

In a nutshell: Wall Street is freaking out about that wage data

9.16pm GMT

It was a poor week for the S&P 500 (a broader stock market index than the Dow)

*S&P 500 SINKS 2.2% TO CAP WORST WEEK SINCE JANUARY 2016

9.14pm GMT

Traders on Wall Street will be nursing bruises; the Dow has lost 1,095 point this week.

Dow Jones ends the week 4.1% lower, worst week since Jan2016. pic.twitter.com/Kis19E763q

9.12pm GMT

This looks like the third-biggest one-day points decline on the Dow ever!

It also looks like the biggest points decline since the aftermath of Lehman Brothers collapse.

Huge POINT decline today for the Dow Industrials-670 points. 3rd biggest decline on record. See below. However, the decline in terms of PERCENT is much much smaller-2.5% pic.twitter.com/ZIbrUub6q2

Our data team informs us this will either be the 6th largest point decline for the Dow in history or its 599th largest one-day percentage decline. #650pointsaintwhatitusedtobe @BenEisen

9.06pm GMT

NEWSFLASH: The US stock market has recorded its worst week in two years, after a wave of selling hit Wall Street.

The Dow Jones Industrial Average has tumbled by almost 670 points, or 2.5%.

8.57pm GMT

One important point - a 600-point plunge isn't what it used to be, due to the strong market rally over the last 15 month.

Dow down 640. Only two 700+ point drops ever. Both during '08. But those slides knocked off about 7%-8% from Dow. Today's fall? Just 2.5%.

8.55pm GMT

Wall Street is staggering towards the finishing line.... with five minutes to go, the Dow is down 675 points or 2,5%.

8.45pm GMT

Equities 2018 YTD: pic.twitter.com/rrRv0lV05q

8.44pm GMT

Inflation fears, worries about the bond market, and rising political tensions are all hitting the markets today, according to CNN's latest market report.

Ken Odeluga, market analyst with City Index in London says:

"We've got a smorgasbord of negativity...It's been pretty nervous all week."

There looks like a breakdown of the institutions in our country.

"No matter what side you're on, that's not good."

Dow plunges 600 points -- worst week in 2 yearshttps://t.co/MXhTZ8SZLW

8.28pm GMT

The Dow is now at a three-week low:

8.06pm GMT

Make that a 624-point fall...!

DOW PLUNGES 600 POINTS, MORE THAN 2% https://t.co/Y9bYLMFUYK

8.01pm GMT

Heading into the last hour of trading, the Dow is now down 576 points, or 2.2%.

7.27pm GMT

Half the Dow loss from 6 stocks: Goldman, Apple, Chevron, Boeing, Exxon and Caterpillar

7.26pm GMT

This could be the US stock market's worst day since the aftermath of the Brexit vote....

Last 500 point drop for the Dow was on June 24, 2016 with Brexit - when Dow lost 610.32 points (-3.39%)@CNBC

7.25pm GMT

The selloff is gathering speed!

The Dow Jones industrial average is now down by 500 points, or almost 2%.

A big wage growth number is the biggest risk to the stock market rally, because it means the Fed may get more aggressive in raising interest rates.

7.16pm GMT

Here are a few photos from Wall Street, as traders try to keep pace with today's selloff:

7.11pm GMT

Here's our colleague Richard Partington on the stock market losses today:

Wall Street was heading for its worst week in two years on Friday as markets in Europe also continued to tumble from record-high levels reached less than a month ago.

Investors headed for the exits amid growing fears over a bond market rout, triggered by early signs of inflation in the US as economic growth accelerates. US government bond yields, which rise as prices fall, hit the highest level since January 2014.

6.33pm GMT

With two and a half hours trading to go, Wall Street is solidly in the red.

The Dow is down 1.5%, or almost 400 points, at 25,789 points. The wider S&P 500 is off 1.1%, while the Nasdaq has lost almost 1%.

5.24pm GMT

US wages may be growing, but so is inequality, says Dominic Rushe

It's been a long, slow recovery for US workers but wages finally appear to be growing again, according to the latest jobs report released on Friday. But behind the headline rate the figures show - once more - that inequality is on the rise.

On Friday the labor department released its latest monthly jobs update. The US added 200,000 new positions in January, higher than expected, but the real surprise was in wage growth. Hourly earnings rose 0.3% in January, enough to lift the annual rate up to 2.9%.

5.21pm GMT

It was a bad day all round for global markets. The FTSE 100, as we mentioned earlier, has suffered its worst week since last April

With poor results from Deutsche Bank to add to those of Daimler earlier this week, Germany's Dax has also dropped sharply, recording its biggest weekly fall since February 2016.

5.12pm GMT

Wall Street's slide continues. The Dow Jones Industrial Average is now down 384 points.

4.39pm GMT

The FTSE 100 has closed down 0.63% at 7443.43, as part of the day's global market sell 0ff.

The UK's leading index is down 2.9%, making it the worst weekly performance since 21 April last year when it lost....2.91%.

4.23pm GMT

A quick summary of how bad it has been this week for US markets:

Wall Street on course for its worst week in 2 years: Dow -2.7% this week, S&P 500 -2.5%.

Bond yields posting biggest weekly rise since US election in Nov 2016: 10y yield +18 bps (to a 4-year high of 2.85%), 30y yield +16 bps.

4.09pm GMT

Back with bitcoin, and it has been through the classic rollercoaster ride today.

Having fallen as low as $7625 it is now actually in positive territory for the day, up 0.12% at $9010.

3.47pm GMT

More on the disparities in the US wage growth data:

Higher wage growth, yes... but for whom? Mainly supervisors (18% of private employment), not ordinary workers (82%) $EURUSD $USD #reflation pic.twitter.com/DkfeN233zw

3.27pm GMT

Connor Campbell, financial analyst at Spreadex, said"

The US open made a miserable day all the worse for the European markets, while Bitcoin managed to pull back from the brink.

Following Wednesday's hawkish hold from the Federal Reserve, there was arguably more interest in this non-farm Friday than there has been for a while. And, luckily for the ailing dollar, the numbers didn't disappoint: the headline figure came in at 200k, far higher than both the 181k expected and the 160k posted in January, with wage growth also outperforming forecasts to remain unchanged at 0.3%.

3.21pm GMT

With the dollar recovering in the expectation of an imminent US interest rate rise, the pound has lost some of its recent gains.

Sterling is down more than 1% on the day against the dollar to $1.4119, its biggest daily fall since November last year.

3.17pm GMT

The university of Michigan' survey may have come in better than expected but it did show the consumer sentiment index at its lowest level since September. However chief economist Richard Curtin was positive about the overall picture:

Consumer sentiment has remained largely unchanged for more than a year at very favorable levels. The January Sentiment figure was just 0.2 Index-points below December's, and just 1.1 points below the 2017 average of 96.8--which was the highest yearly average since 2000. Stock price increases and the passage of tax reforms were mentioned by all-time record numbers of consumers. To be sure, there were small offsetting declines among lower income households and residents of the Northeast.

Consumers continued to expect growth in jobs and incomes, but anticipated a slightly higher inflation rate. Importantly, the motivating force behind purchase decisions has shifted from discounts on prices and interest rates to increased confidence in future job security and growth in wages as well as financial assets. This renewed sense of confidence was responsible for the recent declines in savings rates.

3.08pm GMT

The upbeat consumer confidence figures have sent Wall Street even lower, with the Dow Jones Industrial Average now down 300 points or more than 1.1%.

3.07pm GMT

More positive news for the US economy, adding to the belief that the Federal Reserve will be ready to raise interest rates next month.

The University of Michigan consumer sentiment index came in at 95.7 in January, up from an initial reading of 94.4 and better than the expected figure of 95. It was however slightly lower than December's final reading of 95.9.

2.57pm GMT

Jasper Lawler, head of research at London Capital Group, suggests the slump in bitcoin could be one of the reasons for the current weakness in global stock markets:

Markets participants found themselves in the rare position of witnessing falling prices this week. It has naturally sparked questions of whether a larger correction is in store. The Dow Jones has pulled back 3% while the FTSE 100 has dropped nearly 4.5%. These are relatively small moves and based on recent experience, the mostly likely scenario is dip-buyers step in to send markets back up again. However, maybe this time will be different. The market has reached some new extremes in sentiment during January and certain risk-factors, notably the rise in bond yields, could point to further stock market declines.

It's conceivable that the Bitcoin bubble bursting has meant retail equity investors were meeting less margin calls.

2.36pm GMT

As expected US markets are in negative territory after the better than expected jobs figures gave a boost to the flagging dollar.

The Dow Jones Industrial Average is currently down 217 points or 0.8%, on track for its worst weekly performance since January 2016..The S&P 500 opened down 0.6% while the Nasdaq Composite was 0.55% lower.

2.28pm GMT

The rise in average earnings is not spread across the board:

anyone else notice that hourly earnings for production and non-supervisory workers was up just 2.4% y/y (table B8) ? right about where it has been for a while?

The headline series is up 2.9%, but the one that is the bulk of regular workers is not up as much.

2.20pm GMT

Here are the jobs data charts:

2.11pm GMT

Pantheon economist Ian Shepherdson reckons the jobs data should be good for shares.

If productivity growth can keep up with the rise in wages, these numbers ought to be good for stocks. More wage gains = more revenue; steady unit labor cost = no margin hit, so earnings should rise.

2. Rising yields because of normalization/gradual rebound in neutral rate shouldn't be a problem for stocks. A surge in yields because of inflation panic is a different story, but it's not this one.

(At this point.)

2.08pm GMT

Wall Street futures have improved as we approach the opening of the US market.

The Dow Jones Industrial Average is now forecast to open around 200 points lower, better than the 250 loss predicted in the immediate aftermath of the better than expected jobs figures.

1.57pm GMT

Kully Samra, UK managing director at Charles Schwab expects US rate rises this year. And increased market volatility:

The US economy started 2018 on a positive note as the labour market continues to tighten. This latest set of job numbers supports the view that that some of the weakness in December's service-providing industries would revert in January.

Tightening labour market conditions and indications of a pickup in wage growth will be welcomed by the Fed which has expressed concern over benign inflation. While the Fed held interest rates steady on Wednesday, we expect a hike in March as Jerome Powell is expected to continue down the familiar path of keeping inflation under control without raising rates so far or so fast as to stifle the improvement in growth expected this year.

1.56pm GMT

The big picture is that America's economy has been creating jobs each month since early into Barack Obama's first term, and it's held steady under Donald Trump too.

US - JAN #NFP's +200k (exp +180k, prior rev +160k from +148k). U/E rate 4.1% (exp 4.1%, prior 4.1%). Participation steady at 62.7%. pic.twitter.com/9XjxcnPW9s

1.54pm GMT

The upbeat US jobs figures makes it likely there will be an interest rate rise in March barring unforeseen circumstances, according to ING Bank. Economist James Knightley says:

The US jobs report is very strong with payrolls rising 200,000 versus expectations of 180,000. There were some chunky upward revisions too, but the big story is wage growth which looks much, much better. Wages are now growing 2.9% year on year (the fastest rate of growth since 2009) with last month's figure revised up to 2.7% from 2.5%. Unemployment stays at 4.1%, but given the strength of this report it is hard to argue against a March Fed rate hike now.

Wage growth has been the missing link in the strong economic growth, tight jobs market story. We have been hoping for some time to see a turnaround and it does finally look as though something is happening. It backs up evidence from yesterday's National Federation of Independent Businesses small business survey, which showed the net proportion of businesses raising worker compensation is at its highest since 2000. The report also showed you have to go all the way back to 1989 to find when the index indicating the net proportion of businesses that plan to raise worker pay was higher.

1.52pm GMT

US firms are facing a real scramble to find staff to hire, reckons Joseph Brusuelas, chief economist of RSM.

US January NFP: Strong Employment Report. Composition of hiring decisively tilted towards higher wage job creation. Avg hourly earnings up by most since 2009 to 2.9% on a year ago basis.

US NFP: Given that there is roughly one worker per job opening in the economy, the narrative inside the labor market is rapidly shifting from that of triumph to that of concern amongst firms of all sizes over how to fill positions among labor scarcity

1.47pm GMT

Stock futures don't like Payrolls-fuelled turbo boost for #Treasurys, though indices aren't extending pre-open declines much. $DJ dn 242 pts, Nasdaq, -35, S&P futures dn 19.75 pts ^KO

1.46pm GMT

President Trump will probably enjoy today's jobs report, says Dennis de Jong, managing director at UFX.com:

"While criticism of Donald Trump's embattled White House continues to mount, job growth continues to go through the gears, with the latest nonfarm payroll figures proving job creation remains a competence within the president's capabilities.

"Buoyant domestic and global demand, particularly for the manufacturing sector, appear the drivers in higher-than-anticipated numbers, and Trump's fiscal stimulus package is clearly a shot in the arm for economic growth.

1.44pm GMT

A good jobs report = falling shares and bonds.

That's because traders suspect it means US interest rates will rise faster than expected, as inflation worries encourage central bankers to empty the 'punch bowl' of loose monetary policy.

Dow futures slide 244 points after jobs report beats expectations https://t.co/DQ2BKK8qPi pic.twitter.com/uWpXCOVHwR

US 10-year Treasury yield jumps to 4-year high of 2.83% after jobs report https://t.co/MkBsMEmhXY pic.twitter.com/ircSDpIrs7

1.41pm GMT

Financial experts like the look of today's US labor market report.

This is from Christopher Vecchio of DailyFX.com:

Good batch of data here: January US NFP at +200K vs +180K exp, prior revised up to +160K from +148K, U3 unemployment rate at 4.1% as exp, wage growth at +0.3% m/m as exp & +2.9% y/y (vs +2.6% exp, from +2.7%). $DXY catching a break from recent weakness.

*U.S. AVERAGE HOURLY EARNINGS ROSE 2.9% Y/Y, MOST SINCE 2009

AHE 2.9% y/y best since 2009. That's all you need to know.

Average hourly earnings up to by the most since 2009 (yoy), but hours fall. Still, those AHE numbers are probably welcome news for wage Phillips curvers.

Meanwhile are Americans turning to drink? "Employment continued to trend up in construction, food services and drinking places,
health care, and manufacturing." #NFP

1.35pm GMT

The dollar has climbed and US bond yields have risen following the better then expected jobs and wages figures.

But the expected opening losses on Wall Street have increased according to the future market, with the Dow Jones Industrial Average forecast to open down around 250 points. Before the jobs data it was around 220 points lower.

1.32pm GMT

BREAKING: The US economy created 200,000 new jobs last month, a little more than Wall Street had expected.

December's figure have been revised up too, to 160,000 new jobs (from 146,000).

1.28pm GMT

Well, this rather sums up the crypto bubble.

Long Blockchain Corp -- formally known as Long Island Iced Tea -- has announced that it has abandoned plans to buy bitcoin mining equipment.

Hilarious. The company formerly known as Long Island Iced Tea but decided to become a blockchain company is not going to buy bitcoin mining equipment after all. My story on $LBCC. Back when it was still $LTEA. https://t.co/IYWPWi16M1

1.23pm GMT

Tension is building in the markets as investors brace for America's jobs report, due at 8.30am East Coast time (1.30pm in the UK).

As usual, Wall Street experts have a range of predictions. The consensus is that 180,000 new jobs were created in January.

Primary Dealer #NFPguesses:
BNP 230K
Deutsche 210K
BMO 205K
Goldman 205K
Nomura 205K
Jefferies 200K
JPM 200K
Scotia 200K
MS 195K
SocGen 190K
BofAML 180K
UBS 177K
Barclays 175K
Mizuho 175K
RBC 175K
TD 175K
WFC 175K
Daiwa 170K
HSBC 170K
Citi 165K
Credit Suisse 165K

1.17pm GMT

Here's our news story on bitcoin's slide, and Nouriel Roubini's concerns::

1.07pm GMT

Hold onto your hats. Bitcoin is clambering off the mat, and bouncing back to $8,500.

That's still a 5% loss today, though...

Markets reporters trying to follow bitcoin pic.twitter.com/ITIC9Cp4r4

1.05pm GMT

This is turning into a rather bad day for digital currencies.

Ethereum, Ripple, Litecoin et al are all suffering double-digit losses.

#Bitcoin crash Intensifies as global cryptocurrency market loses $400bn. https://t.co/eUrVUhYUNL pic.twitter.com/DVN9c134Xo

12.54pm GMT

Despite the recent plunge, bitcoin is still worth rather more than a year ago....

Wanna feel old? Bitcoin was valued at $1,015 exactly one year ago pic.twitter.com/UfShRchYCn

12.22pm GMT

Bitcoin is being hit by two different issues (as explained earlier).

Firstly, you have the growing threat of regulation, with India's finance minister pledging yesterday to 'eliminate' the use of digital currencies by criminals. That follows similar similar warnings from politicians in the UK, US and South Korea.

Tether's coins have become a popular substitute for dollars on cryptocurrency exchanges worldwide, with about $2.3 billion of the tokens outstanding as of Tuesday. While Tether has said all of its coins are backed by U.S. dollars held in reserve, the company has yet to provide conclusive evidence of its holdings to the public or have its accounts audited.

Skeptics have questioned whether the money is really there.

The regulatory crunch appears closer than ever and sooner or later this market could be headed back down to earth. Selling pressure at the moment is intense as there has been nothing but bad news for bitcoin bulls of late.

The key concern facing the bulls is the CFTC investigation into Tether and the Bitfinex exchange. Claims of full dollar convertibility are under scrutiny. Given there are about 2bn tether coins in existence, there should be a $2bn account somewhere but Tether has yet to prove it or have accounts audited.

11.56am GMT

Ouch! Bitcoin has just tumbled through the $8,000 mark.

It's now trading at $7985 on the Bitstamp exchange, down over 11% this morning as volatile trading continues to rock the digital currency sector.

Bitcoin falls below $8,000. Down 11% today, after the huge fall in value over the past month.

11.47am GMT

The US stock market is heading for another bath.

The Dow Jones is being called down around 220 points, or 0.8%, amid nervousness ahead of today's non-farm payroll jobs report.

It's jobs day and Dow futures are down 200 points as investors fret over climbing global bond yields, ignore Amazon, Apple premarket cheer. It's Groundhog Day too. https://t.co/LH1GiIkdvr pic.twitter.com/MlAyyxRgT1

Gilt yields are at their highest since May 2015 and Bunds at their highest since September 2015. This may well be contributing to the declines we've seen recently across Europe - along with the corresponding appreciation of the euro and pound - and could now be taking its toll on US stocks.

That doesn't necessarily mean we've entered a risk-off period or that stocks are headed for a correction but a sharp rise in yields, as we've seen, can also weigh on equity markets.

The US is heading into some of its biggest budget deficits outside of wars and recessions as Congress debates increasing ceilings on federal spending on top of December's trillion-dollar tax cuts.

Lawmakers are contemplating lifting caps on defence and non-defence spending as they seek a funding deal in coming weeks. The Bipartisan Policy Center, a non-partisan think-tank, predicts that Congress will settle on plans that drive the deficit to 5.7 per cent of US gross domestic product in 2019 as annual borrowing exceeds $1.1tn.

11.35am GMT

Germany's Dax index has now shed all 2018's gains, dragged down partly by Deutsche Bank after its disappointing results.

Oops! #Germany's Dax looks quite ugly. After one of the best Jan on record, Dax now down on the year, having suffered one of the largest selloffs since 2016. pic.twitter.com/XapcDZcCH4

11.33am GMT

Economics professor Nouriel Roubini has just been on Bloomberg TV, blasting bitcoin as the "biggest Ponzi scheme in human history".

.@flacqua asks @Nouriel Roubini if regulating #cryptocurrency will legitimize it. Roubini answers, "I don't think so." @tomkeene @BloombergTV https://t.co/Ng2PG7JNIF pic.twitter.com/1BeAOgr6V7

11.17am GMT

Here's Rob Davies on the job losses at Carillion:

11.15am GMT

There's a good piece in the New Statesman today about the problems in Britain's outsourcing sector, and the lessons to be learned.

In it, Grace Blakeley argues that the demise of Carillion, and Capita's financial problems, show that the outsourcing market is failing, and must change.

Firstly, rather than granting contracts to a small number of huge multinationals which then commission other, smaller specialist firms to do the work, the government should get rid of the middle man and deal with suppliers directly. This would boost small businesses, and tackle the uncompetitive nature of the current outsourcing market. It would also protect the government from another Carillion crisis.

Secondly, public contracts should not be awarded solely on the basis of "value for money". Government contracts should be seen as an opportunity to create public value - where value is understood in holistic rather than narrow economistic terms. The government should account for the wider economic and social impact of its suppliers when determining which supplier should be awarded a particular contract. The Labour party's proposals to account for the quantity and quality of employment created by a supplier, the nature of its corporate governance, its environmental impact and its attitude towards tax suggests how this could be done.

10.12am GMT

NEWSFLASH: Nearly 400 Carillion staff have just been made redundant, following its fall into liquidation last month.

The Official Receiver says it has managed to save more than 900 jobs, but 377 more have lost their jobs. They're now being told to contact the JobCentre.

"As part of the ongoing liquidation of the Carillion group I am pleased we have been able to safeguard the jobs of 919 employees today. Most staff are transferring on existing or similar terms and I will continue to facilitate this wherever possible as we work to find new providers for Carillion's other contracts.

"Despite best efforts it has not been possible to secure the jobs of 377 staff, who will be made redundant. Those affected will be entitled to make a claim for statutory redundancy payments. The Jobcentre Plus' Rapid Response Service stands ready to support any of these employees by providing advice and information so people can move into a new job as quickly as possible.

#OfficialReceiver update on employment in the #Carillion group - 919 jobs secured today; despite best efforts 377 employees to be made redundant:https://t.co/DS7f3cAt77 pic.twitter.com/eFtBeA7utx

10.01am GMT

Noble Francis, economics director at the Construction Products Association, fears that we haven't seen the full impact of Carillion's collapse yet.

Markit/CIPS UK construction activity in January effectively flat in January. House building fell whilst there were marginal rises in commercial & infrastructure after falls in the 2nd half of last year. #ukconstruction #construction https://t.co/GzFiAsgeuc pic.twitter.com/Pj5Xk2jjaV

What we don't know is the impact of the liquidation of Carillion on construction activity. The surveying is likely to have occurred prior to the main effects of work stopping on site in the 2nd half of the month & will mainly have effected the infrastructure & commercial...

...60% of Carillion 72 key projects were in infrastructure & the effect of the liquidation of Carillion on the estimated 25,000-30,000 sub-contractors will only become apparent over the next few months.

9.58am GMT

Duncan Brock of the Chartered Institute of Procurement & Supply says political and economic uncertainty is hitting the UK construction sector, pushing it towards stagnation.

"The blocks to progress included a sharp rise in costs and a shortage of key materials, which contributed to longer lead times as supplier capabilities were stretched to their limits.

"Against this challenging backdrop, though larger orders from cautious clients also failed to materialise, firms retained a sunny disposition with optimism at a seven-month high and a slight rise in employment continued.

9.55am GMT

Sam Teague, Economist at IHS Markit, says there wasn't much New Year cheer in the building sector:

"January's PMI data indicated a difficult start to 2018 for the UK's construction sector, underlined by business activity growth slumping to a four-month low and new orders sliding back into decline.

"A contraction in house building added to lacklustre commercial building and civil engineering markets, and reduced inflows of new work suggest overall activity could slip into decline in February. Furthermore, cost pressures remained intense, fuelled by shortages of input materials and high costs for imported products.

9.49am GMT

Max Jones, global corporates relationship director for construction at Lloyds Bank Commercial Banking, says the collapse of Carillion has hit the construction sector.

Jones explains:

"It has clearly been a month like no other for the sector, so this drop in the PMI reading comes as no major surprise.

"The impact of Carillion's liquidation has rippled down the supply chain and shaken confidence across the industry. There have inevitably been fears for the sub-contractors with exposure to the collapse, though some have drawn down on emergency support from banks, including the 50m Lloyds fund.

9.41am GMT

9.35am GMT

NEWSFLASH: Britain's construction industry has slowed to near stagnation, and housebuilding is in decline.

Data firm Markit reports that UK building companies experienced a "subdued start to 2018", with total industry activity barely rising.

A return to contraction in residential building activity was accompanied by near-stagnant commercial and civil engineering activity. New orders declined, linked by many companies to market uncertainty.

On a more positive note, confidence towards future growth prospects improved, with many firms anticipating an increase in new project wins later in the year.

9.30am GMT

This is turning into bitcoin's worst week since 2013....

Bitcoin falls 9% to below $8,200. It's now -30% on the week, its biggest weekly fall in nearly 5 years.

9.26am GMT

Telecoms group BT is also having a bad morning.

Shares have fallen over 5% to 241.3p, a five-year low, after some underwhelming results this morning.

BT's TV service lost 5,000 customers in final q 2017. But says was "Best quarter ever" as viewin up 23% y-on-y due to Ashes/Champs League. Deal for Sky channels from 2019 cost 50m in "upfront costs".

BT's share price has fallen 4% as growth stalled at its consumer division - where broadband customer additions have slowed and BT TV lost customers despite Champions League and Ashes coverage - in the last quarter of 2017. And the global IT services division continues to tank.

9.15am GMT

At the risk of labouring the point.....

CHART OF THE DAY: Bitcoin has lost more than half its market value in just six weeks. pic.twitter.com/UUoZR9hIKV

9.12am GMT

Economics professor Nouriel Roubini says the 'mother of all bubbles' is now deflating fast:

Bitcoin is the biggest bubble in human history: much bigger than the Mississippi, South Sea, Tech & Tulip bubbles. The Mother Of All Bubbles is now crashing: down 60% from its December peak & still crashing. Will discuss it today with @tomkeene on @BloombergTV from 6am to 7am EST pic.twitter.com/WStGJiRySe

8.57am GMT

European stock markets are on the back foot again this morning, with losses across the board.

Germany's DAX is the worst performer. It's being dragged down by Deutsche Bank, which has lost almost 6% after reporting a a497m loss for 2017 (alongside that $70m fine)

8.49am GMT

Here's Naeem Aslam of Think Markets on bitcoin's decline:

Bitcoin below 10K tells you only one message which is the upward momentum has died out and the odds are that we would continue to consolidate or grind lower.

8.33am GMT

Connor Campbell of SpreadEx agrees that bitcoin is firmly on the back foot.

The biggest story this Friday didn't belong to the traditional markets, however, but Bitcoin. Opening Monday at $11700 - remember at its 2017 it hit $20000 - it is now struggling to keep its head above $8400, following a week that dealt blow after blow to the cryptocurrency.

First there was the introduction of new regulations on anonymous trading accounts in South Korea, one of Bitcoin's biggest markets, followed by reports that Facebook would be banning cryptocurrency adverts on its site. Now comes the news that Bitcoin's pre-Christmas rise is being investigated by the US Commodity Futures Trading Commission for market manipulation, closing out a horrible few days for the previously ascendant product.

8.20am GMT

Deutsche Bank has been fined $70m (49m) by US regulators for attempting to rig a benchmark for interest-rate derivatives and other financial instruments.

"There is no room in our markets for manipulation. We will continue to work hard to stamp it out, wherever we find it."

8.18am GMT

Mike van Dulken of Accendo Markets reckons bitcoin is following a familiar pattern:

The old Bubble chart suggests Bitcoin past fear, headed towards capitulation pic.twitter.com/Nw01pngFVi

8.14am GMT

Miles Eakers, chief market analyst at Centtrip, says Bitcoin has made a "woeful" start to the new year.

"The drop followed comments made by India's Minister of Finance, Arun Jaitley, that the Indian government 'does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system'.

"We anticipate there will be more of such protectionist regulation. This is likely to put Bitcoin under more strain, causing it to drop to the $8000 a coin level."

7.59am GMT

January was a cruel month for digital currency fans, and February isn't turning out much better.

Bitcoin has fallen by 5% this morning to $8,521, its lowest level since late November. That means it's lost more than half its value since peaking near $20,000 in the week before Christmas.

Specifically, regulators are curious about Bitfinex's relationship with virtual currency Tether, which the exchange claims is pegged to the dollar. So in theory, one dollar equals one Tether.

Tether has become a popular way for some investors to buy Bitcoin on exchanges. But the CFTC's probe feeds into worries that Tether may not be actually backed by the dollar, as Bitfinex has provided little proof of the relationship, critics say. That hazy relationship has fueled concerns that Bitfinex may be simply creating Tether coins out of thin air and using Tether to buy Bitcoin-thereby propping up the price of the latter asset.

7.41am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The tightening labour market is yet to put much upward pressure on wage growth, but with core inflation now starting to rebound we suspect that average hourly earnings will not be far behind.

European Opening Calls
FTSE100 is expected to open 5 points lower at 7,485

DAX is expected to open 63 points lower at 12,940

CAC40 is expected to open 9 points lower at 5,445

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