Technicals Support the Market

U.S.-China trade tensions have ratcheted up again following President Trump’s decision to level tariffs on the remaining $300 billion of U.S. imports from China. Combine that with China’s decision to let its currency (the yuan) weaken past the 7 per dollar level, and investors may be more concerned than ever that global tensions could drag down the economy and stocks.

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Market Update: Fri, Aug 9, 2019 | LPL Financial Research

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Daily Insights

More trade worries. Global stocks are modestly lower this morning as investors process reports that the United States is delaying a decision to grant some U.S. companies permission to conduct business with Huawei Technologies, a Chinese tech giant that was blacklisted in May amid the U.S.-China trade dispute. Continue reading

Making Sense of the Yield Curve

The Treasury yield curve is plunging further into inversion, the point at which long-term yields fall below short-term yields.

As shown in the LPL Chart of the Day, Yield Curve Plunges Further Into Inversion, points on the yield curve are nearing alarming levels. The spread between the 3-month and 10-year Treasury yields fell to -31 basis points (-0.31%), approaching the -50 basis points (-0.5%) threshold that has been predictive of recession within a year . At the same time, the spread between the 2-year and 10-year yields has dropped to 11 basis points (0.11%), closing in on inverted territory for the first time this cycle.

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