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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Market Brief Yield Curve Inverts Panic Ensues

Article By: ,  Head of Market Research
August 14, 2019 5:01 PM

Market Brief: Yield Curve Inverts, Panic Ensues
  • FX: Currency market volatility was relatively constrained given the sharp moves in US equity markets. The safe haven Japanese yen and Swiss franc were the strongest major currencies, while the risk-sensitive commodity dollars (aussie, kiwi, and loonie) were the weakest.
  • In addition to the yield curve inversion (see below), an outright contraction in German Q2 GDP and weaker-than-expected Chinese Industrial Production figures raised fears about the macroeconomic environment. Continued tweets from President Trump criticizing the Federal Reserve did little to reassure traders.
  • Commodities: Gold gained nearly 1% on the day while oil (WTI) shed about 3.5%

 

  • US indices reversed yesterday’s gains and more as traders panicked after the 10yr-2yr yield spread inverted, leading to one of Wall Street’s worst days of the year (-3% for major indices).
  • All eleven sectors fell on the day, though Utilities (XLU) held up the most. Energy (XLE) was the biggest loser on the day.
  • Stocks on the Move:
    • Shares in retailer Overstock.com (OSTK, -23%) are in freefall after the company’s CEO espoused conspiracy theories about a “deep state” plot against him.
    • Previous IPO darling Luckin Coffee (LK) dumped 17% after reporting downbeat earnings.
    • Marijuana firm Tilray (TLRY) shed 15% on disappointing earnings.


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