Novosti i prognoe: tržište kapitala od 07-08-2019

The main US stock indices mostly rose, but not significantly, as investors worried about the impact of increasing trade tensions between the US and China preferred safer assets.

The yield on 10-year US Treasury bonds earlier today reached its lowest level since 2016. This further smoothed the yield curve, a closely watched market recession indicator. The spread between the yield on 10-year government bonds and the yield on 2-year government bonds fell to the lowest level since 2007.

The fall in US government bond yields also reflected increased expectations that the Federal Reserve would cut interest rates three more times by the end of the year, with markets seeing a 100 percent chance of a decline in September.

Against this background, shares of banks, including J.P. Morgan Chase (JPM) and Bank of America (BAC) have come under pressure because they will lose the most as a result of lower interest rates.

Another factor that had a negative impact on the market was the fact that China set a lower-than-expected exchange rate for the yuan against the dollar. The People’s Bank of China (NBK) set the official average yuan rate on Wednesday at 6.9996 yuan for $ 1, which is 0.45% lower than the previous day, and only slightly below the psychologically important level of 7 yuan for $ 1.

The trade war between China and the United States has been going on for more than a year. Investors are concerned about its implications for the global economy and corporate results. Some central banks have even begun to cut interest rates under pressure from these fears. At night, New Zealand, India and Thailand all made decisions to lower interest rates.

Most DOW components recorded a decrease (17 out of 30). Outsider were the shares of The Walt Disney Co. (DIS; -4.96%). The biggest gainers were Walgreens Boots Alliance, Inc. (WBA; + 1.89%).

Most S&P sectors completed trading in positive territory. The consumer goods sector grew more than the rest (+ 0.9%). The conglomerate sector showed the largest decrease (-0.7%).

At the time of closing:

Dow 26,006.87 -22.65  -0.09%

S&P 500 2,884.01 +2.24 + 0.08%

Nasdaq 100 7,862.83 +29.56 + 0.38%