| Gold Prices , Friday, August 22nd, 2019
Bid/Ask |
1499.20 / 1500.20 | |
| Low/High | 1492.10 / 1505.30 | |
| Change | -3.00 | -0.20% |
| 30daychg | +82.00 | +5.79% |
| 1yearchg | +303.90 | +25.42% |
(Kitco, Thursday, August 22nd, 2019) – The main part of the yield curve inverted once again Thursday as the yield on the benchmark 10-year Treasury note traded under that of the 2-year note, the third time the recession indicator has been triggered since last Wednesday.
The move came after Kansas City Federal Reserve President Esther George and Philadelphia Fed President Patrick Harkertold CNBC that they don’t see the case for additional interest rate cuts after the central’s bank quarter-point reduction in July.
Shortly after 10 a.m. ET, the yield curve turned negative before floating back into positive territory later in the morning. As of 11:56 a.m. ET the 2-year Treasury yield was at 1.585% while the 10-year yield was above it at 1.598%.
Such an inversion is viewed by many fixed income traders as a sign of a future recession, though forecasting the timing of an eventual downturn is a tougher task.
Though segments of the U.S. yield curve have inverted over the past several months, economists view the difference between the yield of the 10-year and the 2-year notes with great importance. That’s because inversions of that part of the curve have predated every recession over the past 50 years while the last five 2-10 inversions have all led to recessions.
Stocks Mixed Thursday
Stocks were mixed Thursday after the closely watched spread between the yield on the U.S. 10-year bond and 2-year note turned negative yet again. Investors parsed through Fed commentary suggesting a rate cut may not necessarily be the central bank’s next move.
Earlier in the session, stocks had been higher across the board as investors considered corporate earnings, digested European and domestic economic data and awaited a remarks from the head of the Federal Reserve Friday.
Here were the main moves in the markets, as of 10:49 a.m. ET:
- S&P 500 (^GSPC): -0.54%, or 15.92 points
- Dow (^DJI): -0.26%, or 68.83 points
- Nasdaq (^IXIC): -0.87%, or 69.06 points
- 10-year Treasury yield (^TNX): +2.1 bps to 1.598%
Market participants this week have been waiting to hear from Fed Chair Jerome Powell, who will deliver remarks at the central bank’s annual Jackson Hole symposium Friday. Investors widely hope that Powell’s rhetoric will lay the groundwork for further rate cuts over the course of the next few months.
posted by :
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com