Market rout: August 14, 2019

The Dow is down 650 points, on pace for one of its worst point drops in history.

Yet it is down only 2.5% today. That’s far, far from its worst day on a percentage basis. That took place on October 19, 1987, "Black Monday," when the Dow lost 22.6% in a single day.

Here are the worst point drops on record:

Date ... Change

02/05/2018 ... -1,175.21

02/08/2018 ... -1,032.89

10/10/2018 ... -831.83

12/04/2018 ... -799.36

09/29/2008 ... -777.68

08/05/2019 ... -767.27

10/15/2008 ... -733.08

03/22/2018 ... -724.42

09/17/2001 ... -684.81

12/01/2008 ... -679.95

10/09/2008 ... -678.91

02/02/2018 ... -665.75

01/03/2019 ... -660.02

12/24/2018 ... -653.17

08/08/2011 ... -634.76

04/14/2000 ... -617.77

05/13/2019 ... -617.38

06/24/2016 ... -610.32

10/24/2018 ... -608.01

11/12/2018 ... -602.12

The Fed made a big mistake by raising rates in December, said Mohamed El-Erian, chief economic adviser at Allianz told CNN Business anchor Julia Chatterley on the "Markets Now" live show.

Markets freaked out, and they priced in a bunch of rate cuts to correct the December rate hike. Now the Fed has to regain control of its message, El-Erian said.

"The Fed lost control of the narrative. If they don't [lower rates], it will cause market turmoil," he said, predicting another rate cut next month.

"What they should do is regain the narrative," he added. "But it's going to end up doing what the markets want it to do -- but it won't help the economy or the markets, by the way."

The Trump administration delayed action on some tariffs Tuesday, relieving tech companies, which would have been hit particularly hard by the particular import taxes set to go into effect September 1.

After the delay, they'll go into effect December 15.

Trump "blinked," Mohamed El-Erian, chief economic adviser at Allianz, told CNN Business anchor Julia Chatterley on the "Markets Now" live show.

The administration realized that tariffs going into effect on September 1 would have hurt holiday sales, pushing up the prices of computers, smartphones, toys and shoes. Now, those price hikes will go into effect later -- perhaps after the new year.

The yield curve inverted, warning investors that a recession is coming. That's worrying.

But there's some wackiness with this latest yield curve inversion, sending some mixed signals to investors, Mohamed El-Erian, chief economic adveriser at Allianz told CNN Business anchor Julia Chatterley on the "Markets Now" live show.

"We should be concerned about what's pushing yields down, and that is very weak economic data out of China and Germany," El-Erian said. "That is real: The global economy is weakening."

But he noted that the US economy remains healthy. The yield curve is also inverting because the Fed is lowering rates and the global economy is so weak compared to the United States.

Hold onto your hats. Stock market losses are accelerating.

The yield curve inverted. Germany is close to a recession. China's economy is in a major slump. The trade war continues to loom large.

Investors are rushing to safe havens: Bonds are soaring. Gold is up 1%.

It's that kind of day.

Macy's (M) stock sank 16% after reporting rough earnings.

The department store's profit fell 48% during its spring quarter compared with the same period a year ago and it lowered its profit expectations for the remainder of the year. Macy's stock is down 45% for the year.

Shares of rival retailers also dropped sharply:

They all report earnings in the coming weeks.

Coca-Cola (KO) is the only stock moving higher on the Dow 30 list, our Paul R. La Monica notes:

Mortgage rates are lower than they've been in years, causing a tsunami of refinancing.

The average rate on a 30-year fixed rate mortgage fell to 3.93% last week for loans of $484,000 or less — the first time those loans have been below 4% in nearly three years, according to the Mortgage Bankers Association, the industry trade group. Rates are even lower on larger mortgages and on 15-year loans.

That sparked a 37% jump in the number of refinancing loans last week compared to the previous week, said the MBA. Compared to a year ago, the rate of refinancing has nearly tripled.

Read more here.

The Dow slid more than 400 points after the bond market, for the first time in over a decade, flashed a warning signal that has an eerily accurate track record for predicting recessions.

The 10-year Treasury bond yield fell near 1.6% Wednesday, dropping just below the yield of the 2-year Treasury bond. It marked the first time since 2007 that 10-year bond yields fell below 2-year yields, a phenomenon that has preceded every recession in the modern era.

US stocks fell as investors sold stock in companies and moved it into bonds.