Investors show concerns over North Korea, Hurricane and interest

6 sept. 2017

On Monday, investors were also faced with news that another major storm, the category five Hurricane Irma, was headed for Florida, on the heels of Harvey’s destruction in Texas. Comments from Fed governor Lael Brainard that urged caution on lifting short-term interest rates while inflation remains subdued also underpinned the advance in US government debt.

As investors bought US government debt, they retreated from US equities, sending major benchmarks lower on the day. The S&P 500 fell led by losses in the shares of financial companies. The Dow Jones Industrial Average declined 1.1 per cent and the technology-heavy Nasdaq Composite was off nearly 1 per cent.

The yield on 10-year Treasuries fell more than 10 basis points, its lowest level since just after the US election, while gold climbed to its highest level in nearly a year.

“It is primarily a flight to safety”

“The market still wants to buy yen every time there’s a North Korea story"

“We should be cautious about tightening policy further until we are confident inflation is on track to achieve our target,” said Brainard, a permanent voting member of the Fed’s monetary policy committee who in the past has convinced colleagues to delay tightening.

Investors have rapidly lowered their expectations that the Fed will be able to raise rates again this year. On Tuesday, the odds of a quarter-point rate rise by year’s end fell to one-in-four from one-in-three the day before.
bonus: cnbc.com/2017/08/30/debt-ceiling-would-be-more-catastrophic-than-lehman-s-and-p-says.html

8 sept. 2017

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