RockCreek Daily Market Update

GLOBAL MARKET SNAPSHOT 

Equity Markets: 
Stocks suffered heavy losses and erased all their weekly gains following the increase in trade tensions between the U.S. and China. Just before the U.S. market open, China announced it would set tariffs on auto, soybean and oil imports representing approximately $75 billion worth of goods. The decision was in retaliation for the recent tariff hike from the U.S. that was set to take effect in September. Following the news, President Trump vowed to escalate the trade war. After the market closed, the President Trump announced that he would increase the current tariffs on $250 billion of goods from 25% to 30% and the new tariff on $300 billion of goods from 10% to 15%. What was supposed to highlight the day, in a speech at Jackson Hole, Fed Chair Powell mentioned that the Fed would continue to “act as appropriate” while characterizing the U.S. economy as in a “favorable place” but facing “significant risk”. With the pickup in risk aversion, VIX increased by 3.2 points closing just below 20. The energy and technology sectors took the brunt of the selling falling -3.4% and -3.3%, respectively.

Bond Markets: 
Demand for safe haven assets sent Treasury yields tumbling with the 10-year finishing lower by -9 bps to 1.53%. Despite all the focus on the inversion of the 2s10s spread, the relationship is still yet to close a trading session inverted, and stands at a positive 1 bp.

Currency Markets: 
The U.S. dollar index declined -0.6% with havens leading as markets went risk-off as the bell sounded for the next round of the trade war. Japanese yen and Swiss franc each appreciated +1.0%.

Commodity Markets:  
The U.S. dollar index declined -0.6% with havens leading as markets went risk-off as the bell sounded for the next round of the trade war. Japanese yen and Swiss franc each appreciated +1.0%.

MACRO OVERVIEW

There were no notable macroeconomic releases on Friday.

 

    

 

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The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or to participate in any strategy. Nothing contained herein shall be relied upon as a promise or representation as to the past or future performance.   This material represents the views of RockCreek.  This information should not be construed as investment advice. Some of the information may be provided to discuss general market activity, industry or sector trends, or other broad-based economic, market, or political conditions.  Information and opinions are as of the date of this material only and are subject to change without notice.  RockCreek has no obligation to provide any updates or changes to such information. The opinions, forecasts, assumptions, estimates, and commentary contained in this material are based on information provided to RockCreek on both a formal and informal basis.  Further, any such opinions, forecasts, assumptions, estimates, and commentary are made only as of the date of this material, are subject to change at any time without prior notice and cannot be guaranteed as accurate.

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