5 things to know before the opening of the stock market August 21, 2019

Target's and Lowe's shares skyrocketed before Wednesday's release after the latest retail results showed the US consumer remained strong. Target had higher earnings and earnings estimates in the second quarter. The company has also raised its outlook for the year. Lowe posted better than expected results for the second quarter up and down. A day earlier, his biggest rival, Home Depot, also posted strong earnings. The strength of the consumer comes when the Fed is considering another rate cut at its September meeting.

DoubleLine Capital CEO Jeffrey Gundlach said the Fed was losing control of rates, citing as evidence the overnight lending rate of federal funds of 2% to 2.25%. That's more than any part of the Treasury yield curve, he noted. "What else do you need to call it an inversion?" Gundlach said in an interview with Reuters. "Everyone is analyzing all these little arbitrary things, but we have an inversion." Last Wednesday, the 10-year Treasury yield reversed and briefly went below the 2-year yield, a development that preceded each recession over the past 50 years. However, a recession does not occur immediately, taking on average up to two years to materialize.

European and Japanese government bonds are not the only fixed income instruments to produce negative returns in recent times, with negative-yielding corporate debt recently surpassing the $ 1 trillion level, a sign of the current year. a continuous shift of capital on a global scale. While the government's negative returns have been around for a while, negative-yielding corporate debt is a relatively new thing, rising from just $ 20 billion in January, according to market researcher Jim Bianco.

President Donald Trump has stated that he "thought" of reducing payroll taxes, less than a day after the White House denied that such a measure was in the study. "We think the payroll tax needs to be addressed and many people would like to see it, and this is affecting the workers in our country a lot," Trump told reporters at the White House on Tuesday. Trump went on to say that he "thought about payroll taxes for a long time". But he warned that "whether we do something now or not, it's not done because of the recession."