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Home / Business / Dow drops 800 points after bonds warn of a possible recession

Dow drops 800 points after bonds warn of a possible recession



NEW YORK >> Recent Developments in Financial Markets:

UPDATE: 10:00

The Dow Jones Industrial Average fell 800 points after the bond market signaled a possible recession for the first time since 2007. [10] The yield on the 10-year government bond fell briefly below the two-year yield today, an ominous signal that predicted past recessions.

Investors have been investing in long-term US government bonds for months. Yields plummeted as they expect slower economic growth.

Macy's fell 13% after slashing his full-year earnings guidance.

The Dow Jones Industrial Average fell 800 points or 3% to 25,479.

The S & P 500 lost 85 points or 2.9% to 2,840. The Nasdaq lost 242 points or 3%, 7,773.

The bond prices rose. The yield on the 1

0-year government bond fell from 1.68% on Tuesday to 1.58%, a big step.

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Increasing signs of a global economic slowdown pounded equities, depressing government bond demand so much that they were shorter Long-term yields in the US rose above long-term interest rates for the first time since 2007.

The S & P 500 fell more than 2.8% and the Dow Jones Industrial Average fell more than 750 points as an inverted interest gap for two- and ten-year Treasury notes indicating a warning that usually preceded a recession, and the 30-year yield fell to its lowest ever level. Financials fell 3.1%, led by a 4% decline at Goldman Sachs Group Inc. All 30 Dow components declined.

Volatility has hit the S & P 500 since President Donald Trump reignited the trade war in early August. The index has yielded at least 1% in 11 consecutive sessions over the course of the day and has now fallen 5.5% from its July record. Oil fell 5%, gold rebounded and the dollar rose.

"With continued uncertainty in US-China trade, investors are increasingly selling first and asking questions later," said Alec Young, global market research director for FTSE Russell. "The only thing that seems capable of reversing volatility is credible evidence that global growth is bottoming out. That seems too much to hope for. "

European equities lost more than 1.5% after the German economy shrank in the second quarter, fueling fears of weak Chinese retail and industrials. The British yield curve reversed for the first time since the financial crisis, and the pound rose after inflation surged unexpectedly. Government bonds rallied throughout Europe and yields on benchmark Bunds fell to a new record.

The bond market warning unsettled investors, who were already seeking protection from the tense geopolitical climate and the effects of the global trade war a day after the rise in stock prices on a deferred payment of President Donald Trump. While curve inversions usually precede economic downturns, they do not necessarily signal impending doom.

"This is not a positive sign for the market," said Jonathan Golub, chief strategist for US equities at Credit Suisse, Bloomberg TV. "The Fed is fully capable of changing that momentum, and the market says it needs to do that."

Meanwhile, after a chaotic night of protests in which demonstrators beat and arrested two suspected infiltrators and warned Trump to return to normal operation, Hong Kong's airport was bustling with Chinese troops.

The most important movements in the markets:

BÖRSEN

  • The S & P 500 Index fell 2.8% from 14:43 New York time.
  • The Dow Jones Industrial Average lost 2.9% and the Nasdaq 100 fell 3.1%.
  • The Stoxx Europe 600 Index fell 1.7%.
  • The German DAX index fell by 2%.
  • The MSCI Emerging Market Index rose 0.2%.
  • The MSCI Asia Pacific Index rose 0.9%.

CURRENCIES

  • The Bloomberg Dollar Spot Index rose 0.2%.
  • The Euro rose 0.3% to $ 1,1143.
  • The British pound climbed 0.1% to 1.2073 USD.
  • The Japanese yen rose 0.9% to $ 105,787.

Bonds

  • The yield on 10-year government bonds fell 12 basis points to 1.59%.
  • Two-year government bond yields fell nine basis points to 1.58%.
  • The 10-year UK yield fell three basis points to 0.465%.
  • The German 10-year yield fell three basis points to -0.64%.

19659021] Gold rose 1% to $ 1,529.20 an ounce.

  • West Texas Intermediate crude dropped 5.2% to $ 54.16 a barrel.

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