US stock indexes fell sharply today, reacting to the news of the inversion of yields on US short- and long-term government securities, which heightened fears of a severe slowdown in economic growth and even recession, news agencies reported.
According to data from the New York Stock Exchange’s website, the Dow Jones Industrial Index fell 801 points (3.05 percent) at the time of the close. The S&P index, which includes the 500 largest companies in the US market, fell 85.72 points (2.9 percent). And the NASDAQ electronic stock index fell 242.42 points, or 2.8 percent.
This collapse is a signal for investors’ concerns about the outlook for the economy, DPA notes. This inversion was considered an indicator of a coming recession if there was no successful intervention by the government or the Federal Reserve. But some analysts believe that due to the excess interest rates, which have been maintained for more than decades, even this can no longer be relied on.
The Wall Street Journal, quoted by TASS, notes that such a collapse in quotes was caused by the inversion, with the yield on 2-year US Treasury bonds exceeding the yield on 10-year bonds for the first time yesterday. The last time such a phenomenon was observed in the US economy in 2005, on the eve of the global economic crisis that erupted in 2008.
Last night’s decline wiped out profits from the previous day, when markets rose sharply due to news from President Donald Trump that he was withdrawing some of his threats to impose additional duties on a number of Chinese goods, which were due to come into force next month.
Despite the denials from his administration, Trump’s announcement is being acknowledged as an admission that customs and the trade war do not affect US consumers at all.
Meanwhile, the price of gold is rising
The price of gold is rising and is headed to a new threshold of $ 1600 an ounce, Bloomberg news agency reported. The price of gold is rising.
The reason for the appreciation is the deteriorating US-China relations and trade disputes between the two countries. This has cooled expectations for global economic growth and stimulated demand for gold as an alternative for investors, the agency said.
On Monday, the price reached $ 1544 an ounce, and at the end of last week there were also higher quotations – $ 1553.25. The price of gold is rising, informs in 24 hours.
According to most analyzes, gold again shows resilience as an investment in times of crisis, with only 20% rising since the beginning of the year. The appreciation is supported by the relentlessness of US President Donald Trump on trade issues.
Large-scale gold buying from central banks is likely to continue as a trend in the coming years, according to Australia & New Zealand Banking Group Ltd., which still has potential for purchases from countries such as China and Russia.
The accumulation of gold from central banks has become an extremely important trend in the global market, providing additional support for precious metal prices, which reached their highest level since 2013.
Gold is projected to continue rising in value as investors continue to seek refuge from trade tensions. In addition, a further fall in interest rates is expected from the Federal Reserve, analysts said.