| Good morning. Nvidia's record wipeout adds to the rout in risk assets, the bond rally turns `dangerous' for some, and Goldman Sachs warns on Trump's economic impact. Here's what's moving markets. — Kristine Aquino Risk assets were pummeled in US trading on Tuesday, with the S&P 500 delivering its biggest loss since the `Manic Monday' meltdown in August and Nvidia suffering a record $279 billion rout. Meanwhile, oil wiped out its gains for the year as traders turned their focus to tepid global demand for crude following a prospective deal to restore supplies from Libya. Investors will get the latest indication of economic sentiment in China, the world's top crude importer, from the August reading for the Caixin gauge of services due on Wednesday. That's expected to show a slowdown from the previous month. Meanwhile, Treasuries led bond gains across the globe — yet there are signs the rally is becoming "a little dangerous to chase," according to Ed Al-Hussainy, a rates strategist at Columbia Threadneedle Investments. Thirty-year US yields fell by the most in a month, signaling investors are growing more convinced that inflation is under control. Yet the risk for bond bulls is that the labor market — which cooled sharply in July — will show resilience, allowing the Fed to move at a more moderate pace. That sharpens the focus on data due on Friday, which is forecast to show hiring and wage growth picked up in August. In the booming world of exchange-traded funds, there were no holiday doldrums last month. Investors added $75 billion to such funds in the US, five times more than during the same period in 2023. It may well prove the tipping point that keeps inflows roaring toward another historic annual cash haul, after July saw $122 billion — the second-biggest monthly intake ever. ETF inflows are on pace to approach — or even surpass — the record $911 billion addition in the low-rate-anything-goes era of 2021, data from Bloomberg Intelligence show. "You had investors piling into bonds, buying the dip on stocks, rotating into small caps — it's a recipe for strong flows," said Athanasios Psarofagis, an ETF analyst at Bloomberg Intelligence. There's likely to be more volatility emanating from the Bank of Japan's shift to higher interest rates, according to T. Rowe Price's Arif Husain, who was early in sounding the alarm on this development last year. "BOJ monetary tightening and its impact on the flow of global capital is far from simple, and it will have a large influence over the next few years," said Husain, whose firm oversees about $1.57 trillion in assets. The warning comes as BOJ Governor Kazuo Ueda reiterated Tuesday that the central bank will continue to raise rates if the economy and prices perform as expected — a comment that propelled the yen to its biggest advance against the dollar in more than a week. Goldman Sachs economists warned that the US economy faces a hit in the event that Donald Trump wins the presidential election. Gross domestic product would see a peak hit of 0.5 percentage point in the second half of next year in that scenario, according to the team. They assumed a 20 percentage-point hike in China tariffs under Trump, along with higher duties on auto imports from Mexico and the European Union, and a reduction in immigration. Should Vice President Kamala Harris win and deliver new spending and expanded middle-income tax credits, that would result in "a very slight boost to GDP growth on average over 2025-2026," the economists said. Here's what caught our eye over the past 24 hours: While Tuesday's equity selloff has come out of the blue to an extent, it is clearly being led by many of the year's tech high-fliers, most notably Nvidia. The chart of that stock is starting to look a little ugly, with a clear rejection of the previous highs (and indeed, a second consecutive lower intermediate high.) More generally, growth remains a clear concern for the market-- both in terms of economic data and as an investment factor. The Russell growth/value ratio has been sounding a warning for a few days now-- it peaked on Aug. 20 and turned notably lower, even as the SPX kept rallying. That weakness has unsurprisingly followed on, and the ratio is now sitting on something of a key level. It's bang on a trendline that has survived four previous challenges over the past year or so, and seemed to mark turning points in the ratio even prior to that. It's rarely a good idea to preempt a break of an important level like that, so the jury is still out on whether it will go. Still, a clean close below will represent a clear warning that the August recovery in equities may have been partially a chimera, and that further downside looms for many of the market's expensive high-fliers. Cameron Crise is a macro strategist who writes for Bloomberg's Markets Live blog. Sign up for Hong Kong Edition newsletter to get an insider's guide to the money and people shaking up the Asian finance hub. | 
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