By Guy Bentley – Markets are in free fall after the Dow Jones Industrial Average plunged more than 1,000 points minutes after the opening bell rang Monday.

Standard & Poor’s 500-stock index slipped five percent while the Nasdaq took an even greater pounding of eight percent.

The Shanghai Composite Index shed close to nine percent by the close of business, making it the worst slump for the index since 2007. Investors across the world are spooked by the lack of economic dynamism in China and the prospect of slowing global growth.

With little reassurance from the Chinese government that there will be decisive action to counter the slowdown equity markets are tending toward the more bearish side of the spectrum.

China’s recent currency devaluation, the biggest for over a two decades, gave investors reason to the believe the Chinese government is no telling the full story about the health of the country’s economy. (RELATED: Stunning Chart Of China’s Shock Currency Devaluation Shows Biggest Drop In 20 Years)

European markets are faring no better with Britain’s FTSE 100 five percent, Germany’s Dax six percent lower and France’s CAC 40 a stunning seven percent down.

Traders are increasingly nervous about the implications of today’s business. Speaking to the BBC, NYSE floor trader Stephen Guilfoyle, said US markets are “bordering on the edge of panic but not quite there yet.”

Commodity markets have also taken a beating with U.S. Crude falling below $40 per barrel. If China looks like it’s in trouble commodity markets will take fright as China remains one of the world’s leading users of key commodities.

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