Economy Flashes More Warning Signs as Treasurys Sink to ‘Historic’ Lows
Economy Flashes More Warning Signs as Treasurys Sink to ‘Historic’ Lows
Countdown to Catastrophe? What the Yield Curve Means for Stock Bull MarketsMore
16 August, 2019, 16:50
US stocks suffered the worst day of the year Wednesday as bond market flashed a warning sign of recession.
China's threat to impose counter-measures in retaliation for the latest USA tariffs knocked stocks sprawling on Thursday, checking earlier attempt to recover from a rout sparked by fears of a world recession.
Market benchmarks in Shanghai, Tokyo and Hong Kong all retreated.
US investors dumped stocks Wednesday, sending the Dow Jones Industrial Average into its biggest one-day drop of the year, after the yield on 10-year Treasury bonds crossed a threshold that has correctly predicted many past recessions.
Senior US officials said on Wednesday China has made no trade concessions after Trump postponed the 10 percent tariffs on over $150 billion worth of Chinese imports, the latest sign that efforts to reach a trade deal were going nowhere. Traders have said that the shipbuilder's stock is oversold but were not surprised that investors have yet to "bottom fish".
Japan's Nikkei 225 fell 1.2%, and the Hang Seng in Hong Kong rose 0.8%.
The S&P 500 fell into a bear market between November 1980 in August 1982, losing a total of 28 percent during that period. Markets in Taiwan, New Zealand and Southeast Asia also retreated. South Korea and India were also up.
A pan-European equity index opened marginally firmer while S&P500 futures rose 0.6%. This pushed the Dow down 800 points ahead of recession concerns. The Nasdaq composite lost 3% to 7,773.94.
The trade war has hammered global demand, with Chinese industrial output hitting a 17-year low while investment and retail sales have also slowed in the world's number two economy. Tech stocks and banks led the broad sell-off. Retailers came under especially heavy selling pressure after Macy's issued a dismal earnings report and cut its full-year forecast.
The major USA stock indexes spent much of the day reacting to big moves in US government bond yields, which fell sharply in the early going, fluctuated for much of the day, and then recovered some of their decline by mid-afternoon. However, a spokeswoman for the ministry later said, "We hope the USA will meet China halfway, and implement the consensus of the two heads of the two countries in Osaka".
All of the 11 primary S&P 500 sectors retreated around market close, with the energy sector down almost 4 percent, leading the laggards.
In terms of a potential recession, Falconio said they did not anticipate a recession at this time, due to the weakening yet still decent USA economic growth.
Euro zone government bond yields went further into negative territory, reflecting fear of an impending global recession after the USA yield curve remained inverted for a second day.
When the U.S. Federal Reserve cut interest rates last month for the first time in more than a decade, it signalled that further reductions in borrowing costs might not be needed. The yield on the 10-year Treasury has dropped from 2.02% on July 31 to below 1.60%.
Treasury notes below the two-year yield, the first such drop since 2007, in what is known as a yield curve inversion and widely seen as a sign of a looming recession.
Those concerns helped drive the yield on the 10-year Treasury down as low as 1.48% Thursday from 1.58% late Wednesday. Unemployment held steady at 5.2%.
The trade war with China has already been very destructive, and the political uncertainty of Trump, high debt levels and other structural weaknesses are creating problems.
But oil prices continued to fall after sinking 5% on Wednesday as fears of a global slowdown intensified.
Global benchmark Brent crude LCOc1 fell $1.25 to settle at $58.23 a barrel. It lost $1.82 the previous session to $59.48.
The dollar was little changed at 106.20 Japanese yen, compared to 106.23 yen Thursday.
The Dow Jones fought to secure modest gains on Thursday, even as the 30-year Treasury yield crashed to a record low below 2%. Long-term bond yields plunged to historic lows on Thursday, as investors continued to pile into the perceived safety of U.S.
This past May saw Disney CEO Bob Iger confirm the next Star Wars movie would be by Benioff and Weiss, so things may have changed. We can see familiar faces from the movie show up in the trailer, including General Hux, Captain Phasma and even Kylo Ren.
Add Climate Change as an interest to stay up to date on the latest Climate Change news, video, and analysis from ABC News. The last five years have been the hottest on record and 2019 looks to end up among that top five ranking.
Murphy was stabbed while in bed at her Santa Monica apartment but was able to fight back, causing the attacker to cut himself. He is likely to be extradited to IL to face a separate trial in that case, which unearthed new evidence in 2011.
Police found the van at 8 a.m. about 75 kilometers away in the village of Gordonton, with the body of the Australian inside. A spokeswoman for St John said they were called to the incident at 8.11am and sent an ambulance and rapid response vehicle.
Bruce brags in the movie that his fists are "registered as lethal weapons", adding that he'd "cripple Muhammad Ali". Or he could apologise or he could say "I don't really know what Bruce Lee was like".
Except we all know they both lost to Royole who released their bendy phone earlier in the year, when it sold out in hours. So close, yet so far for Huawei , whose foldable Mate X smartphone is reportedly being delayed once again.
The American then beat Adrian with a fine shot after a swift run down the flank, but his effort was ruled out for offside. Mane gave Liverpool the lead five minutes into extra-time, driving home after an exchange with Firmino.
Because Team USA, led by Spurs legend Gregg Popovich, appears to be in big trouble two weeks before the FIBA World Cup. For now, Kemba Walker is the team's best player and he is being supported by some of the NBA's young guns.
Mohit Malik along with the team of Kulfi Kumar Bajewala paid homage to the departed soul by being present during her last journey. Vidya Sinha was 72 years old and was suffering from chronic lung diseases which lead to her illness and deterioration of health.
Kohli powers India to ODI series win
Kohli continued to be the rock of the India innings and brought up his century with the visitors closing in on victory. Rain halted play for the third match in a row in the ODI series between hosts Windies and India .
How Huawei helped Museveni spy on Bobi Wine
In a statement issued to The Wall Street Journal itself, a Huawei spokesperson wrote and flagged off the allegations as false. This article has been updated to include comment from Huawei South Africa.
Pakistan says 5 killed by Indian fire in Kashmir
Associated Press writers Aijaz Hussain in Srinagar, India, Mariya Amrayeva in New Delhi and Ahmed Munir in Islamabad contributed. The prince, or maharaja, agreed to have Kashmir become part of India under duress .
Rival plans to stop no-deal Brexit clash
However, his chances of success were crippled by the Leader of the anti-Brexit Liberal Democrat party, Jo Swinson, who said Mr. Johnson's "do or die" pledge, lawmakers are urgently seeking a way to remove him or change the law to delay Brexit .
N. Korea fires more projectiles, rules out talks with South
The presidential Blue House urged Pyongyang to stop such actions which could heighten military tensions on the Korean peninsula . A second summit in Hanoi in February broke up amid disagreements over sanctions relief and concessions from the North.
Dayton mass shooter had drugs in his system, coroner says
A judge has been reviewing where Kollie would stay under house arrest with electronic monitoring and other conditions. Dayton police Chief Richard Biehl said the goal of police was to end the violence on the night of the shooting.
German GDP shrinks in second quarter
The development of foreign trade dragged economic growth as exports logged a stronger quarter-on-quarter decline than imports. He added: "The bottom line is that the German economy is teetering on the edge of recession".