A volatile stock market, near-double-digit unemployment and a stalled housing market led to a drop in U.S. consumer confidence in July, to its lowest point in nearly a year. That resulted in a chill on spending — bad news for Asian economies whose exporters rely on America as a key market.
"That really shows that people don't have faith in the future. People are afraid of losing their jobs and are putting off buying things," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "America is in danger of falling into recession. If the economy does not pick up, it will go the way of Europe."
Investors also were shaken up after witnessing Wall Street tumble on Friday, with all major U.S. indexes losing 2.5 percent or more. Second-quarter results from Citigroup Inc. and Bank of America Corp. disappointed investors because revenue fell even as the banks generated an increase in profits.