Overview: Stocks experienced another volatile week as U.S.-China trade updates and investor concerns over a slowdown to the global economy dominated the headlines. Stock markets rallied midweek after President Trump delayed the imposition of new tariffs from September to December. Economic data from the U.S. and China signal that both countries are suffering from the trade war. Stocks across the globe finished down about 1% for the week, but remain firmly in positive return territory for the year-to-date. Investors have been unsettled by the inconclusive and volatile headlines, and have been piling into safe-haven assets such as bonds and cash, driving the 10-year Treasury yield down to 1.54% by week end. Ten-year Treasury yields have fallen from a level of 2.0% at the start of August, leading to a 2.3% month-to-date return for the taxable bond index.
Economic data last week saw U.S. core CPI rise 2.2% year-over-year, and retail sales up 0.7% in July, well above expectations. This week, highlights will be the release on Wednesday of the Federal Open Market Committee minutes from the last Federal Reserve meeting. In addition, Fed Chair Powell will be speaking on Friday, with markets looking for clues on further interest rate cuts.
Sources: Goldman Sachs Asset Management, Bloomberg, Pac Global
Week Ending 08/16/19
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