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BUSINESS Wednesday 28 august 2019
A25

US stock indexes veer slightly lower, shedding early gains

By ALEX VEIGA 2000 index 1.3% lower.
Associated Press Major indexes in Europe
U.S. stock indexes veered were broadly higher.
lower in midday trading U.S. indexes are on track
Tuesday, giving up early for losses of 3% or more in
gains, as investors shifted August in what has been a
money into government volatile month for the mar-
bonds and other less risky ket.
assets. ANALYST'S TAKE: While the
Financial stocks fell the most inversion in the yield curve
as bond prices surged, pull- between the 10-year and
ing yields sharply lower. The two-year Treasury notes
yield on the 10-year Trea- has been a good indica-
sury note fell to 1.48% from tor of a coming recession in
1.54% late Monday. That the past, it usually means a
yield is the benchmark for recession is at least a year
interest rates that banks off, said J.J. Kinahan, chief
charge on mortgages and market strategist for TD
other consumer loans. JPM- Ameritrade.
organ Chase fell 1.6% and "Just because it happened
Citigroup dropped 2.3%. doesn't mean the world
The drop in the 10-year ends," he said. "We do still
Treasury yield may have In this Aug. 19, 2019, file photo trader Frank Masiello, left, and specialist Anthony Matesic work on have the China tariff situa-
put investors in a selling the floor of the New York Stock Exchange. tion, which many believe, if
mood because it declined Associated Press settled quickly, could also
below the yield on the two- lead to a quick economic
year Treasury. This so-called zard gained 3.6%, Exelon Last week, the trade con- coming increasingly cir- expansion."
inversion of the U.S. yield added 1.9% and Welltower flict escalated again with cumspect about what lies TRADE WAR: On Friday,
curve has accurately pre- rose 1.5%. Washington and Beijing ahead. UBS, the largest China announced new
dicted the past five reces- The latest losses undercut threatening new tariffs on wealth manager in the tariffs on $75 billion in U.S.
sions. When the yield curve some of the gains from each other's goods, trigger- world, recommended that goods. Trump responded
inverted earlier this month Monday, when tentative ing a sharp sell-off in global customers reduce their ex- angrily on Twitter, at one
for the first time since 2007, optimism among inves- markets. On Monday the posure to stocks, the first point saying he "hereby or-
it led to a broad market sell- tors about the potential for market recouped some of time the bank has done dered" U.S. companies with
off. The yield on the two- progress in the costly trade those losses after President so since the depths of Eu- operations in China to con-
year Treasury fell to 1.51% conflict between the U.S. Donald Trump said his ne- rope's debt crisis in 2012. sider moving them to other
from 1.53% on Monday. and China drove a broad gotiators had received en- KEEPING SCORE: The S&P countries, including the U.S.
Technology and industrial market rally. couraging calls from China 500 was down 0.5% as of Trump later announced the
stocks also fell. Western The market is on a four- over the weekend. Traders 12:27 p.m. Eastern Time. The U.S. would increase exist-
Digital lost 4.4% and Ray- week losing streak as in- drew encouragement from Dow Jones Industrial Aver- ing tariffs on $250 billion in
theon slid 2.7%. vestors try gauge whether the development, even age dropped 133 points, or Chinese goods to 30% from
Communications compa- trade conflicts and slow- though China's foreign min- 0.5%, to 25,764. The Nasdaq 25%, and that new tariffs on
nies rose, as did safe-play ing economies around the istry denied knowledge of fell 0.6%. Smaller company another $300 billion of im-
sectors like utilities and real world will drag the U.S. into any such calls. stocks bore the brunt of the ports would be 15% instead
estate stocks. Activision Bliz- a recession. Market watchers are be- selling, sending the Russell of 10%.q

Poland plans no budget deficit for first time in 30 years

WARSAW, Poland (AP) — two parliament chambers about the condition of income tax, and better col-
Poland's next annual state and the president. state finances, especially lection of personal income
budget will for the first time "We are very responsible after inflation started to rise tax. Significant funds are
in 30 years not run a deficit, in managing the public fi- this year. also expected from a tax
mainly thanks to efficient nances," Morawiecki said, Morawiecki noted that the on pension funds, from the
tax collection and changes promising that the budget state finances were helped sale of 5G wireless licenses
to the pension system, the will "no longer be an ATM by an increase in state in- and green gas certificates,
prime minister said Tues- for tax-evading criminals." come, such as value-add- and by reducing state ad-
day. The announcement comes ed sales tax and corporate ministration jobs.q
Mateusz Morawiecki spoke before Oct. 13 parliamen-
following a weekly govern- tary elections, in which the
ment session that approved ruling party is expected
a draft 2020 budget where to win a majority, chiefly
spending and income are thanks to its program of
balanced at 429.5 billion generous subsidies to fami-
zlotys ($109 billion). lies with children and to the
Morawiecki noted that elderly. Morawiecki vowed
it is Poland's first budget all these programs will be
without a deficit since it continued.
became a democracy. The government's high
It still needs consultations spending has caused con-
with worker and employer cern among some econo-
groups and approval from mists and ordinary Poles