BIG NUMBER
-.11%
(Click the chart below to view and download)

WHAT IT IS
The yield that a new German 30-year bond fetched in auction this past week in the country’s first-ever sale of 30-year debt at a negative interest rate.

MARKET/POLICY NOTES
It was a quiet week until Friday, when China announced new tariffs on U.S. goods and President Trump retaliated by upping tariffs again. Federal Reserve Chairman Powell spoke at a meeting of central bankers in Jackson Hole with little impact on rates.

HOW MARKETS REACTED
The eruption of the trade dispute sent the S&P 500 down by about -2.5% on Friday. For the week, the S&P declined -1.4%, while international markets (MXEA) were up +.9% and emerging markets returned +.4% (MXEF). Interest rates continued to drop worldwide.

WHAT THIS MEANS
Trade continues to breed anxiety in both the markets and businesses. Investors are voting with their cash, parking it in long-term fixed income at unattractive, and sometimes negative, interest rates. This behavior only makes sense if global growth slows further.

WHAT TO WATCH
It’s the last week of August and a quiet period on the data front. There’s a second look at Q2 GDP on Thursday, and the Personal Consumption Expenditures (PCE) price index, the Fed’s favorite inflation gauge, is out on Friday. The G7 meeting wrapped up on Monday with little meaningful news

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