New York (CNN Business)The Dow and the broader stock market finished a week of topsy-turvy trading in the red.
Even though the Dow (INDU) turned positive in the last hour of trading, it couldn't hold onto its gains, closing down 91 points, or 0.3%.
The S&P 500 (SPX) finished down 0.7% and the Nasdaq Composite (COMP) declined 1%.
All three indexes also ended the week lower, with the Dow dropping 0.8% since last week. By Thursday's close, the S&P and the Nasdaq had retraced their loses from earlier in the week, but the Dow was still lagging behind. Monday was the worst day of the year for the three stock benchmarks.
Weakness in the European economy and a still-escalating trade war sent bond yields down once again — and stocks along with them for most of Friday.
President Donald Trump said Friday the United States had no choice but to take stern actions against China.
"We're not ready to make a deal, but we'll see what happens," the president said.
Trump also said the United States is "not doing business with Huawei." The White House has reportedly been considering an extension of its ban on Huawei.
China priced the yuan lower once again Friday, and the trade war has no end in sight.
Stocks were in the red and extended losses after Trump's comments.
The 10-year US Treasury yield is trending lower again. The US government bond yield dropped to a three-year low Wednesday as investors bought bonds as a safety investment amid the market turmoil. This change in risk sentiment put pressure on stocks. Yields rebounded Thursday.
On the economic data front, the US producer price index for July advanced 0.2%, in line with expectations and flat at 1.7% on the year. This measure of inflation still tracks below the Federal Reserve's target rate of 2% and reflects a slowing down in manufacturing activity amid weaker global demand.
In Europe, stocks closed in the red after the UK economy contracted for the first time since 2012in the second quarter, and Italy's Deputy Prime Minister Matteo Salvini called for fresh elections.
Equities finished lower down across the board, with Germany's DAX (DAX) leading losses of more than 1%. Italian bond yields jumped higher, showing that investors aren't confident in Rome resolving its problems. In May 2018, trouble in Italy's government along with worries about the country's financial health and the impact on the European economy triggered a selloff in US stocks.
Dow Jones, DAX 30, FTSE 100 Forecasts for the Week Ahead
Aug 11, 2019 7:00 pm +10:00
by Peter Hanks , Junior Analyst
DOW JONES, DAX 30, FTSE 100 FUNDAMENTAL FORECAST:
The Dow Jones, S&P 500 and Nasdaq 100 will await US CPI data which could complicate the case for further Fed rate cuts
Meanwhile, the DAX 30 and FTSE 100 will await GDP and CPI data respectively
Equity markets have been dominated by the conflicting themes of trade wars and monetary policy as of late, and that trend looks poised to continue in the week ahead. While there is little scheduled event risk for either theme next week, CPI data from the United States and the United Kingdom will weigh in on the balancing act of monetary policy while the German DAX 30 is due for GDP data. DOW JONES FORECAST
After President Trump unexpectedly escalated the ongoing trade war with China, stocks sank, and the odds of another rate cut at the September FOMC meeting have surged. Many analysts hold that those odds are largely to blame for the stock market’s recovery last week and will likely remain as the dominant tailwind for the foreseeable future. While a prolonged trade war with China threatens to weigh on growth, Fed officials can point to that weaker growth as evidence for monetary easing while simultaneously stoking inflation which has drawn the Fed’s ire as it languishes beneath the central bank’s 2% target.
DOW JONES PRICE CHART: DAILY TIME FRAME (NOVEMBER 2018 – AUGUST 2019) (CHART 1)
With that in mind, Tuesday’s scheduled release of CPI data could threaten the need for rate cuts under the guise of stoking inflation - should a significant beat of expectations occur. Such a development would likely rattle equity markets as traders weigh the consequences higher inflation will have on expected hikes.
what we can expect
Futures point to a negative start, currently down minus 22 but i recon we finish the day down 60 or more,
breakfast
just to help out our southern friends who are suffering for the cold, i've cooked up a big hearty batch of Vietnamese Duck's Blood Soup, but dont worry, it is congealed, enjoy
