FYI: U.S. stocks climbed for a second consecutive session Friday but remain on track for modest weekly losses as investors continue to parse signs of slowing economic growth.
Positive developments around trade and reassurances of extra stimulus from central bakers buoyed markets, which were rattled earlier this week after weak data out of Germany and China exacerbated fears of a potential recession. Concerns about weakening corporate earnings and uncertainty over the pace of the Federal Reserve’s potential interest-rate cuts have added to the unease.
Many investors have rushed to cut their exposure to riskier stocks and instead sought the relative safety of U.S. government bonds, which sent the yield on the 30-year Treasury bond to a record low this week.
The Dow Jones Industrial Average is on track to end the week down about 1.5%, despite Friday’s rally of 306 points, or 1.2%. The blue-chip index suffered its steepest loss of the year Wednesday following the disappointing overseas data and ominous signals from the bond market.
Sentiment appeared to shift Thursday after retail sales data indicated American consumer spending had remained strong in the face of global headwinds, countering weakness in the manufacturing space.
The ever-shifting signals have left traders scrambling to keep up.
The yield on 10-year Treasurys rose to 1.545% Friday, from 1.534% a day earlier. The 30-year bond slipped below 2% again and was briefly as low as 1.979%, according to Tradeweb.
Earlier this week, so many investors piled into long-term U.S. government debt that the yield on the 10-year Treasury note briefly fell below two-year yields for the first time since 2007, an inversion that is viewed by many as a signal that a recession could be on the horizon.
Investors will be watching next week for any signs of progress in the U.S.-China trade talks. President Trump said Thursday that he plans to have a call with Chinese President Xi Jinping soon and face-face negotiations on a possible trade deal will resume next month.
Despite the volatile week, major indexes in Europe and Asia finished Friday higher.
The Stoxx Europe 600 rose 1.2%, led by gains in its technology and utilities sectors. A top official at the European Central Bank said Thursday that it will announce a package of stimulus measures at its next policy meeting in September that should exceed investors’ expectations.
In Asia, Hong Kong’s Hang Seng gained 0.9%, while stocks in Shanghai rose 0.3%. China’s State Council pledged Friday to cut financing costs for businesses and vowed better credit support for companies with high creditworthiness
In commodities markets, U.S. crude rose 0.8%. Oil prices have been volatile in recent sessions as tensions in the Strait of Hormuz ratcheted up. This week, Gibraltar released an Iranian tanker impounded in July, opening the door for Tehran to free a British-flagged vessel it seized. Fears about a global slowdown have also pressured oil as slowing economies can lead to weaker consumption.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-08-16/your-evening-briefingMarketWatch:
https://www.marketwatch.com/story/dow-futures-rise-over-200-points-as-bond-yields-rebound-2019-08-16/printWSJ:
https://www.wsj.com/articles/global-stocks-follow-u-s-markets-higher-11565943373Bloomberg:
https://www.bloomberg.com/news/articles/2019-08-15/asia-stocks-to-slip-after-rocky-u-s-session-markets-wrap?srnd=premiumIBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-finds-crucial-support-big-cap-tech-stocks-rally/CNBC:
https://www.cnbc.com/2019/08/16/stock-market-us-bond-market-trump-china-relation-in-focus.htmlReuters:
https://www.reuters.com/article/us-usa-stocks/wall-street-extends-gains-on-german-stimulus-hope-idUSKCN1V613RU.K:
https://uk.reuters.com/article/uk-britain-stocks/uk-shares-bag-gains-after-delayed-stock-market-open-idUKKCN1V60QTEurope:
https://www.reuters.com/article/us-europe-stocks/german-stimulus-hopes-pull-european-shares-from-6-month-lows-idUSKCN1V60L0Asia:
https://www.cnbc.com/2019/08/16/asia-stocks-august-16-us-bonds-us-china-trade-currencies-in-focus.htmlBonds:
https://www.cnbc.com/2019/08/16/us-bonds-treasury-yields-climb-away-from-record-lows.htmlCurrencies:
https://www.cnbc.com/2019/08/16/forex-markets-dollar-global-economy-in-focus.htmlOil:
https://www.cnbc.com/2019/08/16/oil-markets-us-retail-sales-global-economy-in-focus.htmlGold:
https://www.cnbc.com/2019/08/16/gold-markets-us-bond-yields-us-china-trade-in-focus.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 
