Asian shares rise following broad rally for USA stocks

Andrew Cummings
August 11, 2019

Wall Street was back in a buying mood a day after markets took another turbulent ride as investors anxious about global fallout from the U.S.

"Overnight you had three other central banks in the Asia Pacific region lower rates unexpectedly and that spooked traders", Mike Matousek, head trader at U.S. Global Investors, told ABC News, referring to larger-than-expected rate cuts by India, Thailand and New Zealand. The flight to safety propelled gold prices to above $1,500 an ounce, representing a six-year high.

The dimming expectations for global growth also send the price of crude oil down $2.54, or 4.7%, to settle at $51.09 a barrel.

US stocks turned higher Wednesday afternoon as investors shook off early jitters that had briefly pulled the Dow Jones Industrial Average down more than 580 points.

The S&P 500 rose 54 points, or 1.9%, to 2,938.

The S&P 500 is up 6.04 points, or 0.2%.

INSURANCE BENEFIT: American International Group rose 3.9% after the insurer blew past Wall Street's second quarter profit forecasts on strong underwriting and a jump in investment income. The ministry's spokesperson, Hua Chunying, was quoted by Reuters as saying that while China does not want a trade war with the USA, it is not afraid of fighting one.

The rally, which pushed the Dow Jones Industrial Average up by more than 370 points, followed an early rise in bonds yields after a weekly government report on unemployment claims came in better than economists had expected.

On Monday, the yuan fell to its lowest level against the USA dollar in over 10 years, below 7 yuan per United States dollar, after Trump threatened additional tariffs on Chinese goods.

Since this bull market began over a decade ago, the S&P 500 has had 24 days where it lost at least 3%.

A three-month Treasury was yielding 0.28 percentage points more than a 10-year Treasury as of Wednesday afternoon.

Stocks are falling sharply on Wall Street again as fearful investors dumped stocks and shoveled money into bonds. In 17 of the 24 times that the S&P 500 fell 3%, it either preceded or followed another such drop within a month. The gap between the yield on the three-month Treasury and the 10-year Treasury widened even further.

Markets have been volatile this week after Washington and Beijing raised the stakes in their trade war.

U.S. stocks ended mixed on Wednesday as investors remained concerned about trade tensions between the USA and China.

The Nasdaq Composite traded 1.7 percent lower.

Stocks in the US and other parts of the world advanced after China's central bank made a decision to fix the midpoint for onshore yuan trading at a rate just above 7 a dollar, slightly higher than analysts had been expecting and a sign the country is avoiding escalating tensions with the USA - for now.

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