Asian, European Stocks Mixed After Recession Jitters Spark Sell-Off On Wall Street

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That's also because there's been a long and variable lag between initial inversion and the start of recessions, normally 22 months on average, he noted.

All of the 11 major sectors in the S&P 500 closed in negative territory, with energy, financials, materials, consumer discretionary and communications services all falling 3% or more.

President Trump on Tuesday backed off a September 1 deadline that would have added a new 10% tariff on all remaining Chinese imports, including many consumer products.

More specifically, Mark Haefele, global chief investment officer at UBS Wealth Management, pointed out in a research report on Wednesday that treasury yields were weighed down by the nearly 16 trillion dollars in sovereign bonds globally with a negative yield, distorting their signal about USA economic activity.

What sent the US curve over the brink into inversion was German data on Wednesday that showed the economy had contracted in the quarter to June. "So if you're trying to time this market based on that cross (of the yields between the two-year and 10-year bonds), you might be a little ahead of yourself in the equity side", Cheslock said.

China's threat to impose counter-measures in retaliation for the latest USA tariffs knocked stocks sprawling on Thursday, checking earlier attempt to recover from a rout sparked by fears of a world recession. South Korea and India were also up. In its latest projection, the USA investment bank lowered its fourth-quarter growth forecast by 0.2 percentage points to 1.8 percent.

The spread between the yields of three-month and 10-year notes also posed an inverted curve during the day, which reflected a wave of panic that rippled over the US financial markets.

More news: Did Apple Just Reveal The Launch Date Of The iPhone 11?

"We don't expect a recession over the next 12-18 months, even with announced tariffs on Chinese exports". The S&P 500 .SPX gained 7 points, or 0.25%, to 2,847.6 and the Nasdaq Composite .IXIC dropped 7.32 points, or 0.09%, to 7,766.62.

The bond market has flashed worrying signals over a looming recession on Wednesday with an inverted yield curve. OCBC Bank fell $0.40 or 3.6 per cent to $10.70, while United Overseas Bank (UOB) closed at $25.15, down $0.75 or 2.9 per cent.

Rattled investors then rushed to long-term safe haven assets, pushing the benchmark 30-year Treasury yield to a record low.

Former Federal Reserve Chair Janet Yellen cautioned that concerns about the inverted yield curve might not be correct and that a recession likely is not in the near-term future.

Oil prices plunged with Brent crude LCOc1 losing another 2% to $58.4 a barrel, after shedding 3% overnight.

The dollar index was a shade easier at 97.925, with the under-pressure euro at $1.1149 following Wednesday's soft German data. EURUSD slipped from 1.1200 to 1.1150 over the previous two days, while the stock markets have experienced a rather bumpy road.

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