Market participants generally anticipate a slow August, where junior staff watch the trading desks as more senior staff depart for time off. But this August has defied expectations with geopolitical concerns surfacing around the world.
If you woke up from a decades-long nap in today's world, you would be forgiven for some confusion over market indicators. Certainly, risk aversion assets are securing multi-year highs even as stocks swooned 3 percent midweek, one of the year's worst declines. Gold reached a six-year high, and the U.S. dollar moved to two-year highs. Also this week, one of the strongest slowdown indicators — the closely watched yield curve of two-year Treasury yields against 10-year Treasury yields — inverted for the first time since 2007, CBS News reported.
In another eye-popping data point, about 60 percent of the 500 stocks in the Standard & Poor's index carry dividend yields greater than the 10-year Treasury yield. Also, the 30-year Treasury rate hit all-time record lows this week touching levels below 2 percent for the first time in history. And around the world there is $15 trillion of negative-yielding debt, according to CNBC.
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