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CCTV Script 06/08/19

— This is the script of CNBC's news report for China's CCTV on August 6, 2019, Tuesday.

Typically, August has been a bad month for financial markets in the U.S. and Europe, but the start of this year has been particularly bad. After several days of losses, the U.S. stock market had its worst day of the year overnight. Here are the Dow 30 component stocks; you can see no exception, a wide range of close down, by the end of the day, the Dow was down 767 points.

In intraday trading, the Dow lost as much as nearly 1,000 points.

Tech stocks were particularly bad, with apple and IBM leading the way in blue chips. Tech giants lost $162 billion in market value during the day's trading. The main reason for the losses in the US stock market is the huge selling pressure caused by market panic.

VIX, a measure of market panic, soared nearly 40% to its 7 months peak.

Specifically, the yuan's break of 7 was the focus of market attention, which investors interpreted as China's strongest counterattack yet in the trade war, and the subsequent announcement by the U.S. Treasury Department that China was a currency manipulator directly fueled market panic in the United States. Investors fear a worsening trade war and fear the possibility of the U.S. taking steps to weaken the dollar and trigger a currency war, this has greatly curbed risk appetite in global markets.

Safe-haven assets, such as gold and US treasuries, were boosted, with US 10-year Treasury yields falling to their lowest levels since November 2016.

The trump administration's attitude has been particularly critical. After stirring up frequent and widespread trade disputes, Trump has been pinning his hopes and pressing the fed for some leeway in monetary policy.

The fed cut rates as scheduled, but Powell's comments suggest it does not want monetary policy to diverge from the performance of the real economy. Meanwhile, four former fed chairmen, including Alan Greenspan, have just released a joint statement through the Wall Street journal to press Trump, requiring the Fed to be independent of political pressure to make monetary policy that is truly beneficial to the U.S. economy.

At this critical stage of the presidential campaign, Trump is unlikely to make a compromise stance easily, analysts say. Alan blinder, a former fed vice-chairman, told CNBC that he was concerned that Trump would trigger a chain reaction around the world by using the US Treasury to intervene in the dollar.

CNBC anchor:

Do you really believe that we might actually respond by trying somehow to weaken the dollar?

Alan Blinder

Former Fed Vice Chair

I do, the president and secretary of treasury almost said that. If you think that government intervention can devalue the dollar by 25%, I think you are probably dreaming, they don't have that kind of power, those are not that kind of number we are talking about, but devalue the dollar by a smaller amount by government intervention directly in the foreign currency market, I believe they can.

The dismal performance on Wall Street had already dragged down European stocks on Monday and put significant pressure on Asia-pacific stocks on Tuesday. Over the past week, the NASDAQ and S&P 500 have been the worst performers of the year. U.S. stocks could plunge again Tuesday, based on the performance of U.S. stock index futures in after-hours trading. Trading data now suggest the Dow could drop 630 points. However, some warned that the current market panic is so serious, there are signs of oversold. If the fundamentals of the U.S. economy don't reverse, the sharp drop in U.S. stocks may not last a long time.