In The Hollow Men, poet T.S. Eliot famously said the world would end “not with a bang but with a whimper.”
In the film Groundhog Day, Bill Murray plays TV weatherman Phil Connors who, against his wishes, is sent to report on the annual Groundhog Day event in Punxsutawney, Pennsylvania and, while there, relives Groundhog Day again, and again and again with an eye toward his having the perspective and the time to become a better person, which he eventually does.
Read the Weekly Market Snapshot to stay up-to-date with stock markets and sectors, bond market returns and financial news for the week.
Global growth restructuring is unleashing market volatility. Is this a warning sign of worse things to come? CIO Bob Browne explains.
After a brief relief bounce on hopes that the U.S. might be trying to ease tensions with China, the equity market downturn resumed last week as investors left stocks for the perceived safety of government bonds. Recession-related concerns grew as the Treasury yield curve inverted, more global government bond markets traded in negative territory and poor economic data came out of Germany and China.
The IMF believes the world has too much debt, trade wars are destabilizing and anti-growth, monetary policy has run its course and productivity growth remains comfortably below historic norms.
U.S. equities posted gains during the second quarter, despite a steep sell-off in May due to mounting concerns over trade wars between the U.S. and China, coupled with the possibility of U.S. tariffs on Mexican imports.
The “risk-off” mood in global markets deepened last week – as global government bond yields plunged to historical lows and the inversion of part of the U.S. Treasury curve sparked recession fears. Perceived safe-haven assets such as gold rallied. We still see limited near-term recession risks as central banks’ dovish pivot helps stretch the economic cycle, yet caution that trade and geopolitical tensions pose downside risks.
U.S. Treasury yields closed sharply lower again last week, led by long maturities. By mid-week, the 2-year/10-year Treasury yield relationship inverted for the first time since 2007 and the 30-year yield closed below 2% for the first time ever.
The state of global interest rates is sinking quickly. Negative interest rates have now engulfed over $15 trillion of global sovereign debt with nearly 30% of all developed country sovereign debt having a negative yield.