Global markets are melting down

futures

(FinViz)

Global markets are getting smoked again.

The Dow is down 540 points (3.3%), the S&P 500 is down 66 (3.3%), and the Nasdaq is down 155 points (3.2%).

It was a bloodbath in Europe, with Britain's FTSE down 3.0%, Germany's DAX down 2.3%, France's CAC 40 down 2.4%, and Spain's IBEX down 2.6%.

Asian markets closed deep in the red, with Japan's Nikkei plunging 3.8%, Hong Kong's Hang Seng falling 2.2%, and China's Shanghai Composite tumbling 1.3%.

In the commodities markets, oil is getting slammed with WTI crude futures down 7%.

Here's a quick roundup of the key headlines we've gotten since US markets closed on Monday.

• US manufacturing is decelerating. The ISM manufacturing index fell to 51.1 in August from 52.7 in July. This was worse than the 52.5 forecast by economists, and it was the lowest reading since May 2013. 10 of 18 industries reported growth. From the ISM: "The New Orders Index registered 51.7 percent, a decrease of 4.8 percentage points from the reading of 56.5 percent in July. The Production Index registered 53.6 percent, 2.4 percentage points below the July reading of 56 percent. The Employment Index registered 51.2 percent, 1.5 percentage points below the July reading of 52.7 percent."

• China is slowing. China's official manufacturing PMI fell from 50.0 in July to 49.7 in August, the lowest reading since August 2012. The unofficial Caixin-Markit manufacturing PMI slipped to 47.3 in August from 47.8 in July, signaling the sharpest contraction since March 2009.

• Europe is slowing. The eurozone manufacturing PMI slipped to 52.3 in August from 52.5 in July. Italy, Spain, Ireland, Netherlands, and Austria all experienced deterioration in growth. Meanwhile, France's PMI fell to a four-month low of 48.3, which reflects outright contraction.

• Canada is in recession. GDP contracted at a 0.5% rate in Q2 following a 0.8% contraction in Q1. The back-to-back quarters of contraction mean that the economy is in recession.

• The world is slowing. Korean exports crashed 14.7% in August from a year ago, reflecting the clearest sign that the world economy has hit a snag. This number was much worse than the 5.9% decline expected, and it was also the biggest drop since August 2009. Korea is a major supplier of automobiles, electronics, and petrochemicals to the world. And because this is the first monthly set of hard numbers from a major economy, Korean exports are considered a bellwether of global growth.

• IMF agrees the world is slowing. "Overall, we expect global growth to remain moderate and likely weaker than we anticipated last July," IMF's Christine Lagarde said.

After last week's market's chaos, which saw the Dow plunge 1,089 in less than a day, Wall Street's stock market gurus were quick to point out that the fundamental story of the economy had not shifted.

"We think the 10.2% decline in global equities since 21st May has more to do with a shift in sentiment towards the asset class rather than a substantial change in fundamentals," Barclays' Ian Scott said.

But with new data signaling more slowdown, is it possible that the markets were right the first time?

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