Dow drops more than 100 points as bond-market recession indicator, trade worries worsen

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The Dow dropped more than 100 points as trade uncertainty continued and a recession indicator from the bond market worsened. As the yield curve remained inverted, both the S&P 500 and the NASDAQ also closed down.

The spread between the 10-year Treasury yield and the 2-year rate fell to negative 5 basis points,. This is called a yield-curve inversion. Experts fear it because in the past it has preceded recessionary periods. The 3-month Treasury bill rate also traded higher than the 30-year bond yield.

Sentiment was also dampened after Hu Xijin, editor-in-chief of the Global Times in China, tweeted that China is "putting so much emphasis on trade talks," adding that "it's more and more difficult for the US to press China to make concessions" as China's economy becomes increasingly driven by its domestic growth.

"Given the low volume and breadth on yesterday's bounce, along with China's non-confirmation of any Call, it makes sense to sell into yesterday's move until we see a break of this range," Newton said in a note. "Given a lack of developments on the ongoing China trade dispute, Monday's gains aren't something to be taken too seriously."

 

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RockyMountViews Courtesy Mr Trump, stable genius of economics and finance?

There is no more liquidity you gave all to the Chinese elders thanks to your GOP and DNC leadership and then they cut the line credit off FDICgov to the world ask your RoyalFamily so all you have is the cash on you. No more food stamps NYCHRA welfare SocialSecurity

RockyMountViews Have the media considered that Trump’s trade related burbles don’t really matter much to the markets?

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