John Hancock: Weekly Market Recap Week Ended August 9th
Choppy markets
U.S. stock indexes dropped for the second week in a row, but their overall declines were around a half a percentage point—tiny, given the market’s shaky start. The indexes tumbled around 3% on Monday—the largest single-day decline year-to-date—but they recovered most of that ground over the next three days.
Yields tumble—again
Just a week after dropping below 2.00%, the yield of the 10-year U.S. Treasury bond fell further, briefly sinking as low as 1.60% on Wednesday. However, that level was a far cry from the depressed yields in many other developed markets; Germany’s 10-year bond sank deeper into negative territory to as low as –0.60%.
Cutting in tandem
On the heels of last month’s U.S. interest-rate cut, central banks in India, New Zealand, and Thailand lowered rates on Wednesday. Trade tensions have recently weighed on economies and equity markets across much of the Asia-Pacific region.
Gold tops threshold
The price of gold breached the $1,500-per-ounce level for the first time in six years, extending a strong run for the precious metal amid declining bond yields and high trade tensions. Until recently, gold had stayed within a fairly tight range of $1,150 to $1,350 over the past three years.