Market moving news daily roundup – events & news likely to move markets 14th August 2019
Company performance, economic and political events but especially market sentiment will always influence market movement, good or bad.
Market moving news roundup, 14th August 2019
Summary
China – U.S. trade update
China, reportedly, will hold trade talks with the U.S. in September as originally scheduled. This news comes as U.S. relaxes tariff increases.
The U.S. President has ‘pulled back’ on some tariffs on Chinese goods that had been included in the latest round levied on $300 billion of imports facing the extra 10% tariff.
Chinese economic data released Wednesday 14th August 2019 pointed to a further slowdown. China is the world’s second largest economy. Asian stocks rise with the NIKKEI up by around 1% following the U.S. climb yesterday. Hong Kong unrest remains in focus.
German economy facing recession?
German GDP data released today, 14th August 2019 shrank by 0.1% in Q2 (second quarter), raising fears that Europe’s biggest economy could be heading for a recession. A recession is defined as two consecutive quarters of negative growth. Trade disputes are blamed for the weak GDP data.
UK inflation at 2.1%
UK – inflation rose to 2.1% in July – up from 2% in the previous month and above an anticipated fall to 1.9%. Where next for interest rates? Will Brexit force the Bank of England to cut rates next and not inflationary pressure?
See latest inflation data and charts here
Update – FTSE 100, DAX indices & Dow futures quietly falling all morning.
FTSE 100 at: 7210 (11:00 BST)
DAX at: 11620 (11:00 BST)
Dow futures at: 26180 (11:00 BST)
Markets get excited by yield curve inversion – painful!
A yield curve inversion has just occurred in both the UK & U.S. And it is the first time it has happened since the financial crisis of 2007/2008. That makes it pretty rare.
What does it mean?
So, why the fuss – What does it mean? Well, basically it means that the UK & U.S. governments can borrow from markets more cheaply over 10 years than it can over two years or even tree months.
The yield on the 10-year gilt fell below the yield on the two-year gilt shortly for the first time since August 2008.
Recession signal?
Why is this significant? Because, it is a ‘red warning flag’ to investors and analysts alike – it is perceived as a precursor to a possible recession.
What a difference a day makes – Dow opens down
U.S. – Yesterday the Dow notched up over 500 points shortly after the open. Today, the index falls back by over 400 pts at the open giving up most of yesterdays stellar gains.
Yesterday it was Donald Trump’s tariff announcement helping the markets go up. Today, it’s the turn of the yield curve inversion as global recession fears re-emerge pushing markets down.
Fickle volatility returns!
U.S. congress places barrier to initial suggestion of sector by sector post Brexit trade deal
Stock market indices update, August 14th 2019
Closing positions of: FTSE 100, DAX, DOW, S&P 500, NASDAQ, NIKKEI & GOLD
I trade these indices.
Global stock markets turn red as recession worries re-appear on investors radars. Trump’s tariff announcement yesterday wasn’t enough to hold back concerns as 10 and 2 year yield curve inverts in both U.S. and UK. Germany is close to recession. Hong Kong unrest continues. China’s economic data points to a slowdown. Trade and tariff woes remain.
Dow drops
Dow closed down 800 points in worst day of 2019 after bond market sends recession warning. Janet Yellen, former Fed chief suggests yield curve inversion may be false signal this time but remains concerned.
FTSE 100 – closed down at: 7148
DAX – closed down at: 11492
DOW – closed down at: 25479
S&P 500 – closed down at: 2840
NASDAQ – closed down at: 7774
NIKKEI – closed up at: 20655
GOLD – closed at around: $1,527
Key: Green highlight markets move up. Red highlight markets move down.
All values rounded.
End