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Market Brief: Yield Curve Inverts, Panic Ensues

Published 08/15/2019, 04:33 AM
Updated 07/09/2023, 06:31 AM
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  • FX: Currency market volatility was relatively constrained given the sharp moves in US equity markets. The safe haven Japanese yen and Swiss franc were the strongest major currencies, while the risk-sensitive commodity dollars (aussie, kiwi, and loonie) were the weakest.
  • In addition to the yield curve inversion (see below), an outright contraction in German Q2 GDP and weaker-than-expected Chinese Industrial Production figures raised fears about the macroeconomic environment. Continued tweets from President Trump criticizing the Federal Reserve did little to reassure traders.
  • Commodities: Gold gained nearly 1% on the day while oil (WTI) shed about 3.5%
  • US Cash Indices % Change

  • US indices reversed yesterday’s gains and more as traders panicked after the 10yr-2yr yield spread inverted, leading to one of Wall Street’s worst days of the year (-3% for major indices).
  • All eleven sectors fell on the day, though Utilities (XLU) held up the most. Energy (XLE (NYSE:XLE)) was the biggest loser on the day.
  • Stocks on the Move:

  • Shares in retailer Overstock.com (NASDAQ:OSTK, -23%) are in freefall after the company’s CEO espoused conspiracy theories about a “deep state” plot against him.
  • Previous IPO darling Luckin Coffee (LK) dumped 17% after reporting downbeat earnings.
  • Marijuana firm Tilray (TLRY) shed 15% on disappointing earnings.
  • Economic Calendar

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