Wednesday, August 21, 2019
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[Most Recent Quotes from www.kitco.com]
[Most Recent Quotes from www.kitco.com]



Market Digest Online TUESDAY, AUGUST 20, 2019: Stocks rose sharply on Monday as Treasury yields rebounded, quelling fears of a possible recession. Equities also got a boost after the U.S. agreed to extend a temporary reprieve to Chinese telecom giant Huawei. The Dow Jones Industrial Average closed 248 points higher, or 1%, led by Cisco Systems. The S&P 500 gained 1.2% as the energy and tech sectors outperformed. The Nasdaq Composite advanced 1.4%.

These gains add to a rebound that started last week after the Dow posted its worst session of 2019. The 30-stock index plummeted 800 points, or 3.1% on Wednesday before regaining some of the lost ground on Thursday and Friday. The S&P 500 is still down 1.9% in August and off more than 3% from a recent record.

The benchmark 10-year Treasury yields rose to about 1.6% from around 1.54%. Bank shares rose along with yields. Bank of America closed 0.9% higher along with J.P. Morgan Chase. Citigroup climbed 1.3%.

"We're seeing more stabilization, and it's really off the back of more stimulus in the air," said Gregory Faranello, head of U.S. rates at AmeriVet Securities. "We’re just taking a little bit of a break but I’m not entirely convinced that the move lower on rates is over."

The People's Bank of China unveiled an interest-rate reform over the weekend aimed at lowering borrowing costs for Chinese companies. In Germany, the government is reportedly preparing fiscal stimulus measures in case the country's economy falls into a recession. Economic growth in China and Germany has slowed down this year amid tighter trade conditions, leading investors to rush into safe havens like the 10-year Treasury note.

Last week, the 10-year yield fell to its lowest level in more than three years and briefly traded below its 2-year counterpart. This is referred to as a yield-curve inversion and is seen by traders as a potential signal that a recession may be on the horizon.

Fears of a recession come as the U.S. and China engage each other in a trade war. Over the past year, the two countries have slapped tariffs on billions of dollars worth of their goods. The U.S. has also targeted Huawei in the trade war, making it more difficult for U.S. companies to do business with the Chinese telecom.


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