The Fed will cut interest rates by 25 basis points and will end the balance sheet contraction in advance. Powell said that interest rate cuts are essentially policy adjustments in the cycle, but not the beginning of a long series of interest rate cuts. US stocks have plunged after Powell’s speech while short-term bond yields have risen. The White House said that China has confirmed its commitment to increase procurement of US agricultural products, and the two sides will continue consultations in Washington in early September.
- The Dow Jones Industrial Average closed at 26,864.27 points, down 333.75 points or 1.23%. The Standard & Poor’s 500 Index closed at 2,980.38 points, down 32.80 points or 1.09%. The Nasdaq index closed at 8,175.42 points, down 98.19 points or 1.19%.
- The Fed will cut the interest rate by 25 basis points and will end the balance sheet contraction in advance. Chairman of Fed Powell said that interest rate cuts are essentially policy adjustments in the cycle, rather than implying that it is entering into an expansionary cycle.
- US bipartisan senators have proposed a bill to manage the dollar exchange rate by imposing a “market access fee” on foreign stock purchases of US stocks, bonds and other assets.
- The UK’s FTSE 100 index closed at 7,586.78 points, down 59.99 points or 0.78%. The Frankfurt DAX index closed at 12,189.04 points, up 41.80 points or 0.34%. The French CAC40 index closed at 5,518.90 points, up 7.83 points or 0.14%.
- The British government has allocated another 2.1 billion pounds for preparing no-deal Brexit, showing that Prime Minister Johnson will take a tough stance on leaving the EU with or without agreement at the end of October
- The economic difficulties in the euro zone support the central bank to increase stimulating policies. The GDP growth of Eurozone is 0.2% in the second quarter of 2019, which is much lower than that of first quarter.
- Japan’s Nikkei 225 index closed at 21,521.53 points, down 187.78 points or 0.86%. The yen closed at 108.560 against the US dollar, up 0.055%.
- Japan said that it is still planned to remove South Korea from the list of trusted export destinations due to national security needs.
- The Shanghai Composite Index closed at 2,932.51 points, down 19.83 points or 0.67%. The Shanghai and Shenzhen 300 Index closed at 3,835.36 points, down 34.96 points or 0.90%. The RMB closed at 6.883 against 1 US dollar, down 0.035%.
- The White House issued a statement saying that the Shanghai economic and trade consultation is “constructive” and China has confirmed its commitment to increase procurement of US agricultural products. China and the US will continue to hold talks in Washington in early September.
- The People’s Bank of China decided to increase the amount of sub-loan for small and micro enterprises by 50 billion yuan, focusing on supporting small and medium-sized banks to expand credit supply to small and micro enterprises.