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Global Markets Rebound, Yield Curve In Focus, Recession Fears Simmer

By:
Thomas Hughes
Published: Aug 16, 2019, 12:38 UTC

Global markets are rebounding from fresh lows but uncertainty remains, risk of recession grows.

Global Markets Rebound, Yield Curve In Focus, Recession Fears Simmer

The U.S. Futures Are Up In Early Trading

The U.S. futures market is indicating a relatively strong open on Friday morning. The Dow Jones and S&P 500 are both indicated up about 0.90% while the NASDAQ Composite is up more than 1.10%. The move comes a day after volatile trading carried the major indices to two-month lows. Despite the rebound, uncertainty remains high as recession fears continue to simmer. The U.S. yield curve threw off its strongest recession signal this cycle on Wednesday and remains close to a 2 yr/10 yr inversion.

Shares of GE are among the day’s leaders. The company received a vote of confidence from sell-side bulls and Larry Culp, GE’s CEO. Culp bought $2 million in GE shares Thursday after a massive selloff sparked by claims of fraud. The Madoff Whistleblower says GE is financial fraud, Culp says the claims are market manipulation. Nvidia is also sharply higher in early Friday trading after reporting much better than expected earnings. In economic news Housing Starts and Building Permits paint a mixed-picture. Housing starts were a bit weaker than expected but permits, a gauge of future starts, surged more than 8.0%.

EU Markets Move Higher, UK Delayed By Glitch

The EU markets are higher at midday on Friday although the U.S. yield curve remains center-stage. The FTSE is trailing with a gain of 0.65%, the FTSE open was delayed by two hours due to a technical glitch. The DAX is up 0.90% at midday, the French CAC a little more than 1.10%. Utilities and banks lead, both sectors are up more than 1.40%. In individual stock news, shares of IMCD are down -13% after issuing weaker than expected earnings results and a profit warning from the CEO.

Asia Mixed, PBOC Weakens Yuan More Than Expected

Asian indices were mixed at the close on Friday. Uncertainty in global markets and a rising chance of recession are to blame. The Hang Seng led the advancing indices with a move of 0.94% far outpacing others. The Kospi led declining indices with a loss of -0.55%.

In China, the PBOC set the midpoint for the yuan higher than expected, weakening the currency again. The bank has been easing the yuan’s valuation over the past two weeks in an effort to stave off effects of U.S. tariffs. In trade news, President Trump continues to sound upbeat about the negotiations although there is no sign of progress. The two sides are talking over the phone with a face-to-face meeting scheduled for Washington in September.

 

About the Author

Thomas has been a professional options trader and investor since October 2005. At that time, Thomas was introduced to financial markets, technical analysis, and financial market analysis. He tracks economic data from the worlds leading economies, corporate earnings, equities, currency, commodities, and cryptocurrencies.

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