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Although President Donald Trump has repeatedly fanned the flames of the trade war, he tweeted Sunday that the United States and China "spoke". He also tried to calm fears of recession, tweeting that an end of the trade war would help stimulate the US economy.
China's reaction to the slowdown in its economy, which was shaken by the trade war, also boosted stocks. The People's Bank of China announced on Saturday that it will facilitate and simplify corporate borrowing, with the aim of supporting growth and employment. This is actually a rate reduction.
Investors, worried after tumultuous bargaining last week, were eating it. the Dow (UNDUE) opened 325 points, or 1.3%, higher, before retreating slightly. the S & P 500 (SPX) was up 1.1% and the Nasdaq (COMP) jumped 1.2%.
Traders have focused on the optimistic view of the future of the White House – and not on the increasingly negative perspective of economists. The National Association for Business Economics released a report Monday that 86 percent of US economists thought a recession was brewing in the next two years.
The yield curve was reversed last week between 10-year and 2-year US Treasury bonds, scary markets and investors of the potential of a US recession in the coming years. An inverted yield curve preceded each recession of the modern era.
A plurality of economists (38%) think that a recession will begin in 2020. However, in some ways, economists are becoming more optimistic. Much less economists think that a recession will occur this year and a growing number of them believe that a recession will occur in 2021 rather than next year, according to the survey.
The huge gains and losses have become the new standard on Wall Street. The Dow was up or down at three digits every day last week, including a 800-point loss on Wednesday, the worst day of the year for stocks.
The optimism generated by financial stimulus measures in the US, Europe and China has supported actions in recent sessions. As the global economy falters, central banks around the world are promising rate cuts, balance sheet growth and more direct forms of stimulus to help support the economies of the respective regions.
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