iFund- Daily Market Commentary

2019-08-16 08:14
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14/8/2019

The US 2-year and 10-year bond yield curve has been inverted for the first time since 2007, issuing an economic recession signal. Trump blamed on the Fed’s policy. The US stocks and crude oil tumbled, while the price of risk averse assets, currencies and gold rose. The White House trade adviser said that there are still seven structural problems to be resolved in the Sino-US economic and trade talks, and the United States will not make concessions in the negotiations.

  • The Dow Jones Industrial Average closed at 25,479.42 points, down 800.49 points or 3.05%. The Standard & Poor’s 500 Index closed at 2,840.60 points, down 85.72 points or 2.93%. The Nasdaq index closed at 7,773.94 points, down 242.42 points or 3.02%.
  • The US 10-year bond yield has fallen below the two-year debt yield for the first time since 2007, signaling a recession, the increasing demand on risk averse assets pushed the 30-year US bond yield to a record low.
  • Former Federal Reserve Chairman Yellen said that the United States can avoid a recession, but the possibility of a recession has risen significantly and exceeded the level that he will give him peace of mind.

  • The UK’s FTSE 100 index closed at 7,147.88 points, down 103.02 points or 1.42%. The Frankfurt DAX index closed at 11,492.66 points, down 257.47 points or 2.19%. The French CAC40 index closed at 5,251.30 points, down 111.77 points or 2.08%.
  • British Prime Minister Johnson said that the EU refused to compromise on the Brexit agreement. Besides, according to the Financial Times, the British Labor Party leaders sought to ally with the opposition, with an aim to avoid the no-deal Brexit.
  • Argentine President Markley announced measures to increase salaries and reduce tax, with an aim to win support from voters.

  • Japan’s Nikkei 225 index closed at 20,655.13 points, up 199.69 points or 0.98%. The yen closed at 106.140 against the US dollar, down 0.867%.
  • Japan’s Ministry of Economy, Trade and Industry announced that after seasonal adjustment, Japan’s third industry activity index fell by 0.1% month-on-month to 106.9, lower than market expectations of a 0.2% drop.

    • The Shanghai Composite Index closed at 2,808.92 points, up 11.65 points or 0.42%. The Shanghai and Shenzhen 300 Index closed at 3,682.40 points, up 16.65 points or 0.45%. The RMB closed at 7.016 against 1 US dollar, up 0.688%.
    • At the end of July, China central bank’s foreign exchange accounted for 21.2 trillion yuan, decreased by 708 million yuan from the previous month.
    • Informed person said that Chinese regulators encouraged commercial banks to participate in local government implicit debt swaps, CCB and CITIC appeared in the Xiangtan disposal plan.



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