The Dow Jones Industrial Average futures were down 0.5%, S&P 500 futures declined 0.6%, and Nasdaq futures lost 1.0%.

The yield on the benchmark 10-year U.S. Treasury note stood at 4.27% this morning, after reaching 4.3% on Thursday, its highest level since 2007.

The performance of equity markets up to the end of July seemed to rule out a killer summer. But that was without counting August, which got off to a very bad start and hasn't really sent any signs of reversal since. Over the recent period, the main indices just had three consecutive down sessions. And barring a miracle today, they will also have accumulated three weeks in a row in the red. This morning, I read that the Nasdaq 100 hasn't fallen so much in three sessions since last February, and that the VIX nervousness index is at its highest level since May.

The rather benign context of the first seven months of the year, fueled by a certain casualness on the part of investors, has given way to what I call chain reaction apprehension, for want of a nicer expression. This is the case in the United States, where financiers are lost in conjecture about the insidious damage of persistently high interest rates. We all know that the accumulation of small cracks can suddenly overwhelm the big dam, and that's exactly what's feared. The problem is that the threat is diffuse and difficult to quantify, all the more so as consumption is soaring and full employment has become the norm.

This is also the case in China, but with more clearly identified areas of weakness. I don't know if there's a VIX index specifically dedicated to the country, but if there is, it must have skyrocketed in recent days. On the basis of a much more empirical indicator - the frequency of political statements and central bank interventions - I think it's safe to say that a hint of panic is gripping China. The real estate sector's collapse is leading to bouts of weakness everywhere, at a time when economic statistics are showing other critical areas. Even property developers are calling on the central government for help. As we know, a real estate crisis can easily turn into a financial crisis, especially in a country like China where the construction sector is oversized. In response, the authorities are asking the banks to make an effort, and the PBOC has cut interest rates. It is also working to support the yuan. A reaction that the markets consider to be too little for the time being.

In the US, yesterday's fall in the indices was reinforced by the stall in healthcare intermediaries, after the WSJ reported that CVS Health had lost the Blue Shield of California contract to Amazon. The share price fell by 9%, while rival Cigna's share price shed 6%. Finally, bitcoin fell by 7%, partly due to rising risk aversion I imagine, but also because the WSJ mentioned in an article that SpaceX, Elon Musk's space company, has reduced its holding of the famous cryptocurrency.

Today's economic highlights:

The dollar is up 0.1% both against the euro and the pound to EUR 0.9206 and GBP 0.7856. The ounce of gold stabilizes at USD 1894. Oil regained some ground, with North Sea Brent at USD 83.75 a barrel and US light crude WTI at USD 79.63. The yield on 10-year US debt fell to 4.25%. Bitcoin continues its slide to around USD 26,370.

In corporate news:

  • Applied Materials- On Thursday evening, the semiconductor manufacturer unveiled a much better-than-expected profit forecast for its fourth quarter, boosted by strong demand. The stock was up 3.2% in pre-market electronic trading as the group also reported better-than-expected third-quarter results.
  • Chevron is facing potential work stoppages, or even a general strike, at Australia's second largest liquefied natural gas (LNG) plant, in Gorgon, and at its Wheatstone operations.
  • Deere & Co - The agricultural machinery manufacturer was up 1.2% before the opening, the group having raised its annual net profit forecast to a range of $9.75 to $10 billion, compared with $9.25 to $9.50 billion previously.
  • Keysight Technologies - The electronics equipment manufacturer fell by 11.2% before the opening following lowered forecasts for its fourth quarter.
  • Hawaiian Electric Industries is up 1.4% after saying it has no plans to restructure. The Wall Street Journal reported on Wednesday that the company was in discussions with restructuring consulting firms to address financial and legal challenges related to its potential liabilities following the Maui fires. Moody's downgraded the group's credit rating to "speculative" on Friday.
  • Bloomin' Brands - The restaurant chain was up 8.7% before the opening. The Wall Street Journal reported that activist investor Starboard Value had taken a stake of over 5% in the company.
  • WeWork - The workspace provider is up 1.3% ahead of the open after announcing that it would proceed with a 1-for-40 reverse stock split of its Class A and Class C common stock, effective September 1.

Analyst recommendations:

  • Aflac: Morgan Stanley downgrades to equal-weight from overweight. PT down 0.8% to $75.
  • Aston martin: Barclays maintains its Overweight recommendation with a price target raised from GBP 3.75 to 4 .
  • Aviva: Berenberg maintains its buy recommendation, with the target price raised from GBP 481 to 493.
  • Aviva plc: Morgan Stanley maintains its "Overweight/Attractive" recommendation, with the target price raised from 470 to 480 GBp.
  • Bae systems: Société Générale maintains its "Buy" recommendation with a price target reduced from 1160 to 1114 GBp.
  • Dunelm group: Numis maintains its "buy" recommendation, with target price reduced from 1450 to 1400 GBp.
  • Globe Life: Morgan Stanley upgrades to equal-weight from underweight. PT up 17% to $131.
  • Foot Locker: Williams Trading upgrades to hold from sell. PT down 8.4% to $23.
  • Hilton food group: Investec maintains its buy recommendation with a price target raised from GBp 676 to GBp 735.
  • IPG Photonics: Citi downgrades to neutral from buy. PT up12% to  $111.
  • Keysight : Wells Fargo Securities lowers PT to $175 from $200. Maintains overweight rating.
  • Kingfisher: Numis maintains sell recommendation with target price raised from GBp165 to GBp175.
  • Legal & general: Morgan Stanley maintains its Equalwt/Attractive recommendation with a price target reduced from 240 to 238 GBp.
  • Maximus: Stifel initiated coverage with a recommendation of buy. PT set at $102.