Both US and international stocks fell by about 1.1%, down for the third straight week. The entire psychology of the market has changed since Trump’s trade tweet a few weeks ago. Investors are worried about the threat of a coming recession. Stocks are now 4.6% off their recent high from July 26, but there have been some wild days since then. The S&P 500 is now working on 12 straight days of intraday moves greater than 1%.
The yield on the 30-year bond fell to 1.98% on Thursday. That was the lowest yield of all time. Also, on Thursday, the 10-year fell to 1.47%, not far from the all-time low of 1.36% from July of 2016. While the 3-month/10-year curve has been inverted for a while now, the 2-year/10-year also inverted intraday during the week, a recessionary signal. There is now $16 trillion in negative-yielding debt around the world.
Stocks rallied on Tuesday when Trump delayed a portion of the new tariffs that he recently announced. But then the market really got hit on Wednesday, down 2.9%, on weak economic data from Germany and trade tensions. On Thursday and Friday stocks did rally back, on a good retail spending report