Breaking News
Close
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Gold, Treasuries rise as recession, trade fears rattle investors

EconomyAug 28, 2019 02:47
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Herbert Lash and Rodrigo Campos

NEW YORK (Reuters) - Declining stocks on Wall Street weighed down a global equities gauge on Tuesday on lingering worries about the U.S.-China trade war, while demand for U.S. Treasuries and precious metals rose on recession fears.

The U.S. yield curve inversion deepened to levels not seen since 2007 and gold futures rose as recession concerns gripped investors. Silver touched a two-year high.

Stocks opened higher on Wall Street after U.S. President Donald Trump said China had offered to resume trade talks, though uncertainty prevailed as Beijing declined to confirm Trump's assertion.

U.S. stocks initially opened higher, building on Monday's advance after Trump's comments. China's foreign ministry, however, reiterated on Tuesday that it had not received any recent U.S. telephone calls on trade.

"It is going to be pretty confusing and unfortunately, without some kind of a major backpedaling on trade... the economy is going to suffer," said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago.

Bank shares , which tend to weaken in lower rate and soft economic environments, lost 1% on Wall Street.

The Dow Jones Industrial Average (DJI) fell 120.93 points, or 0.47%, to 25,777.9, the S&P 500 (SPX) lost 9.22 points, or 0.32%, to 2,869.16 and the Nasdaq Composite (IXIC) dropped 26.79 points, or 0.34%, to 7,826.95.

The pan-European STOXX 600 index (STOXX) rose 0.63% and MSCI's gauge of stocks across the globe gained 0.03%.

Emerging market stocks rose 0.39%. Nikkei futures (NKc1) lost 0.66%.

The deepening yield curve inversion reflects investor nervousness about a recession and uncertainties over the trade conflict between China and the United States.

"It's not a sign of confidence in inflation or a pick-up in growth," said Mike Lorizio, head of Treasuries trading at Manulife Asset Management in Boston.

Benchmark 10-year notes last rose 21/32 in price to yield 1.4744%, from 1.544% late on Monday.

The yield curve inversion also pressured the dollar.

"You have seen a push deeper into inversion in the 2s/10s curve. Today, it's hard to put your finger on one specific driver of that inversion - though that might be contributing to the general sense of risk-off in the market," said Brian Daingerfield, macro strategist at RBS (LON:RBS) Securities.

The dollar fell against the safe-haven Japanese yen while the euro declined against the greenback.

The dollar index (DXY) fell 0.05%, with the euro (EUR=) down 0.1% to $1.1089.

The Japanese yen strengthened 0.35% versus the greenback at 105.77 per dollar, while Sterling was last trading at $1.2285, up 0.57% on the day.

Emerging market currencies suffered across the globe, with the Colombian peso brushing against its record low near 3,478 per dollar.

Oil prices rose, buoyed by expectations of a drawdown in U.S. crude inventories, though gains were capped by worries about a recession and uncertainty over a China-U.S. trade deal.

U.S. crude rose 3.45% to $55.49 per barrel and Brent was last at $59.91, up 2.06% on the day.

Spot gold added 1.1% to $1,542.70 an ounce. Spot silver gained 3.14% to $18.18 an ounce after touching its highest since September 2017.

Gold, Treasuries rise as recession, trade fears rattle investors
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Sourabh Lowanshi
Sourabh Lowanshi Aug 30, 2019 19:26
Saved. See Saved Items.
This comment has already been saved in your Saved Items
trump declare war on china
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
DOWNLOAD APPApp store
Investing.com
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
or
Sign up with Email