Equities Weaken a Third Week

August 19, 2019

U.S. stocks ended a volatile week with back-to-back daily gains, trimming its third straight weekly loss to under 1% after skidding to a two-month low on Wednesday. The S&P 500’s near 3% mid-week loss was caused by a global flight to safety after Germany reported its economy fell into contraction in the second quarter and China’s industrial output growth slowed to its slowest pace in 17 years. The outsized rotation from stocks into U.S. Treasuries pushed the yield curve between two- and 10-year notes to briefly invert, flashing a warning signal that has predicted previous recessions.