August is shaping up to be a brutal month for investors, and we're only five days in. Market nerves are frayed, and panic selling is rampant. Whether these moves are justified or not, they're certainly dramatic. Welcome to a sea of red. Last week was a bloodbath: the Stoxx Europe 600 lost 3%, the Nasdaq 100 dropped 3%, the Nikkei 225 fell 4.5%, oil prices declined 4.5%, the US 10-year bond yield dropped 10%, and Bitcoin tumbled 15%. Investors seem to be on the verge of a collective meltdown.

So, what triggered this chaos? The market had been riding high on the back of a resilient U.S. economy, the allure of AI-driven innovation, and hopes for lower Federal Reserve rates. But now, the narrative has flipped to fears of a U.S. recession. The new mantra? Sell everything and flee to the safety of ultra-secure bonds.

London stocks are expected to follow Asia's downward spiral, that started on Friday after disappointing U.S. nonfarm payroll data, a weak ISM manufacturing index, and escalating Middle East tensions. The Middle East conflict is also weighing heavily on market sentiment. The U.S. has ramped up its military presence in the region amid fears of a broader conflict involving Iran and Israel. Recent assassinations of key figures in Tehran and Beirut have only heightened the tension, with threats of retaliation looming.

Monday's economic calendar includes the eurozone composite PMI, PPI, and various national PMIs. In the UK, Prime Minister Keir Starmer is set to address the escalating disorder related to asylum seekers, with a Cobra emergency response meeting on the agenda. Additionally, the UK government is gearing up to host an International Investment Summit, aiming to attract global investors by emphasizing the country's stability and openness for business. 

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