Although President Donald Trump has repeatedly fanned the commercial war flames, he tweeted
on Sunday that the United States and China "talked" to each other. He also tried to dismantle recession fears by tweeting
that an end to the trade war would contribute to boosting the US economy's trade war. The People's Bank of China announced on Saturday that it would simplify and reduce the uptake of corporate loans to promote growth and employment. It is practically a rate cut.
Investors were quite nervous after the turbulent trading of last week. The Dow [1
94559003] ( INDU )
rose by 325 points, or 1.3%, before retreating slightly. The S & P 500 ( SPX )
increased by 1.1% and the Nasdaq ( COMP )
Stockbrokers focused on the White House's rosy future prospects – not on the increasingly negative outlook of economists. The National Association for Business Economics released a report Monday stating that 86% of US economists believe a recession is imminent over the next two years.
Over the past week, the 10-to-2-year US Treasury yield curve reversed and worried markets and investors about the potential of a US recession over the next few years. In modern times, every recession has been preceded by an inverted yield curve.
A multitude of economists (38%) believe that recession will set in 2020. In some ways, however, economists are increasingly optimistic. Far fewer economists are predicting a recession this year, and more and more of a recession in 2021 than next year.
Huge gains and losses have become the new normal on Wall Street. The Dow was three digits up or down every day last week, including a loss of 800 on Wednesday – the worst day of the year for stocks in the last few sessions. In the face of global economic volatility, central banks around the world promise interest rate cuts, balance sheet growth and more direct incentives to support the economies of their respective regions.