Stocks Rebound but Close a Volatile August Lower while Yields Plummet in the Weekly Market Update by Valeo Financial Advisors (August 31, 2019)
August 31, 2019    Disclosures    POSTED IN  InvestmentsEconomyMarkets

Following the G7 Summit last weekend, President Trump announced China called and wanted to restart trade talks; however, this announcement caused confusion because China could not pin down whether someone contacted the U.S. or not.  Despite the uncertainty around the event, China mentioned its hope to stall planned tariffs which go into effect September 1st, such that it would not have to implement retaliatory measures.  Prime Minister, Boris Johnson, made a surprise move working with the Queen of England to suspend Parliament for a short time, an act known as proroguing.  The Prime Minister is attempting to block anti-Brexit lawmakers from causing a no-deal scenario.  The issues being faced in Hong Kong don’t look any closer to coming to an end, with movement of Chinese troops through the city creating unease.

Equity markets snapped their losing streak and pared back monthly losses as the sentiment around this week’s trade highlights were taken favorably.  Growth concerns still remain which did not do much to ease recession fears as 2nd quarter GDP expansion was revised downward from 2.1% to 2.0%.  Yields on the 30-year U.S. Treasury reached their lowest level ever in August and the 10-year closed at 1.5% which is more than a whole percentage point below its starting level in 2019; this came as Treasury Secretary, Steven Mnuchin, said the U.S. is weighing the possibility of issuing ultra-long maturity bonds (up to 100-year maturity) if the conditions are right.  Markets will be closed on Monday for the Labor Day holiday, and the U.S. is bracing for Hurricane Dorian, currently a category 4, to make landfall in Florida.

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