Although President Donald Trump repeatedly ignites the flames of the trade war, he tweeted
on Sunday that the United States and China were "talking." He also tried to curb fears of recession, tweeting
that ending the trade war would help stimulate the US economy.
In addition, the stimulation of stocks was China's reaction to the slowing economy. trade war. The Chinese National Bank has announced that it will make corporate loans easier and cheaper in order to support growth and employment. This is an effective reduction in interest rates.
Investors ate on the brink after a tumultuous trade last week. The Dow ( INDU )
increased by about 270 points, or 1
%. S&P 500 ( SPX )
jumped 1.2%, and Nasdaq ( COMP )
1.5 %. VIX, a recent market volatility measure, has fallen by 7%.
Stock traders focused on the White House's pink outlook on the future – not the increasingly negative outlook of economists. The National Association for Business Economics published a report Monday that 86% of US economists believe a recession is coming in the next two years.
The yield curve turned between 10-year and 2-year US bonds last week, scaring markets and investors for the potential of a recession in the US over the next few years. The inverted yield curve precedes any recession in the modern era
Many economists (38%) believe that the recession will begin in 2020. But in some respects, economists are increasingly optimistic. Fewer economists think there will be a recession this year, and an increasing number think the recession will come in 2021, not next year, according to the survey.
The huge gains and losses became the new normal on Wall Street. Last week, the Dow was up three or more figures every day, including a loss of 800 points on Wednesday – the worst day of the year for stocks.
Optimism about financial incentives in the United States, Europe and China has bought stocks in the last few sessions. As the global economy disperses, central banks around the world promise to reduce interest rates, balance sheet growth and more direct incentives to help boost the economies of the regions concerned.