FYI: U.S. stocks fell Monday as a wave of selling that analysts attributed to mounting doubts about a trade deal pulled lower everything from bank stocks to shares of technology companies.
Worries about the path of U.S.-China trade negotiations and the global economy have kept stocks and bond yields under pressure for much of the month. Goldman Sachs analysts said Monday that the outlook for trade talks had “collapsed,” adding that they believe Washington and Beijing won’t reach an agreement before the 2020 elections.
Growing uncertainty has contributed to the markets’ volatile streak in recent weeks. At one point midafternoon, selling pressure unexpectedly picked up, dragging the Dow Jones Industrial Average down as many as 462 points before it pared losses. Analysts said there were no obvious catalysts for the move.
The Dow industrials was down 391 points, or 1.49%, to 25896. The S&P 500 declined 1.28%, and the Nasdaq Composite fell 1.20%.
Few believe the U.S. is headed toward an imminent downturn just yet. But many worry that the gloomy outlook reflected in bond markets—where yields across the globe have dropped in recent months—could soon be reflected in stocks too.
“If [yields] keep edging down, the equity market is clearly wrong because the bond market will be telling you we have one mother of a recession coming,” said Neil Dwane, global strategist at Allianz Global Investors.
Bank stocks took a fresh hit Monday as U.S. Treasury yields retreated again, with Citigroup , Bank of America and Morgan Stanley each losing more than 2%. Declining bond yields tend to weigh on banks by cutting into their lending profits.
Semiconductor firms also lost ground, with Nvidia down 2% and Advanced Micro Devices losing 5.2%. Much of the group has pulled back in recent weeks as investors have grown more pessimistic about the prospects of a U.S.-China trade agreement.
Elsewhere, the Stoxx Europe 600 edged down 0.3%, weighed down by declines among lenders and travel and leisure stocks.
Among the biggest gainers in the region was Tullow Oil , TUWOY 18.48% whose shares rose 20% after the company said it had found more oil off the coast of Guyana.
Hong Kong’s Hang Seng Index fell 0.4% after protests at the city’s airport prompted authorities to cancel more than 100 flights. Chinese authorities said the violent weekend demonstrations marked the emergence of “the first signs of terrorism” in the semiautonomous city—and vowed a merciless crackdown.
The Shanghai Composite closed higher, though, notching a 1.5% gain after China’s central bank continued to weaken the yuan, though at a slower pace than traders had expected. That helped ease concerns of a sharp devaluation after President Trump last week accused China of
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-08-12/your-evening-briefingMarketWatch:
https://www.marketwatch.com/story/dow-futures-down-200-points-on-us-china-trade-worries-hong-kong-unrest-2019-08-12/printWSJ:
https://www.wsj.com/articles/global-stocks-jump-led-by-china-rebound-11565599208Bloomberg:
https://www.bloomberg.com/news/articles/2019-08-11/stocks-to-dip-after-u-s-drop-as-caution-reigns-markets-wrap?srnd=premiumIBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-tumbles-400-points-3-blue-chip-stocks-hold-up/CNBC:
https://www.cnbc.com/2019/08/12/stock-market-wall-street-in-focus-after-china-fixes-yuan-at-stronger-than-expected-level.htmlReuters:
https://uk.reuters.com/article/us-usa-stocks/wall-street-slips-on-political-tensions-recession-fears-idUSKCN1V2137U.K:
https://uk.reuters.com/article/uk-britain-stocks/hong-kong-tensions-knock-ftse-100s-asia-exposed-stocks-idUKKCN1V20J8Europe:
https://www.reuters.com/article/us-europe-stocks/european-shares-fall-as-growth-worries-grip-idUSKCN1V20K5Asia:
https://www.cnbc.com/2019/08/12/asia-markets-aug-12-us-china-trade-worries-linger.htmlBonds:
https://www.cnbc.com/2019/08/12/us-bonds-treasury-yields-tick-lower-amid-trade-war-concerns.htmlCurrencies:
https://www.cnbc.com/2019/08/12/forex-markets-us-china-trade-concerns-remain.htmlOil:
https://www.cnbc.com/2019/08/12/oil-markets-demand-outlook-us-china-trade-war-in-focus.htmlGold:
https://www.cnbc.com/2019/08/12/gold-market-trade-tensions-and-recession-worries-linger.htmlWSJ: Markets At A Glance:
https://markets.wsj.com/usMajor ETFs % Change:
https://www.barchart.com/etfs-funds/etf-monitorSPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-trackerSPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectorsCurrent Futures:
https://finviz.com/futures.ashx 
