Wall Street crumbled during yesterday’s session, reversing Monday’s gains and once more posing the question as to whether the year will end on a rather turbulent note. Earlier optimism over improving trade relations between China and the USA has dissipated, whilst signals within US treasury prices are also raising red flags over the longer term economic outlook. The shake out on Wall Street may however have been a little overdone, with investors keen to mitigate risk ahead of today’s market closure as the US observes a national day of mourning for former President Bush. Losses both across Asian markets and also in early European trade have been rather more limited in scope, whilst US index futures started clawing back territory straight after the closing bell.
The market closure today also means that US economic data will be delayed and Jerome Powell’s testimony to Congress will have to be rescheduled. Further clues as to the Federal Reserve’s thinking over how it will manage monetary policy as it apparently braces itself for an economic slowdown could be pivotal in the outlook of stocks.
Index futures currently show the DOW 108 higher at 25,135 and the S&P 15 points higher at 2715.
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Soaring US yields trigger the wrecking ball effect as yields become a source of volatility for risk, rather than a source of support