Global economic recession fears have returned which saw long term Bond Yields move to multiyear lows accompanied by disappointing economic data. A Global recession might be to early to call but investor fears have certainly returned to the market. The graph below illustrates some of the major long-term Bond Yields in the U.S compared to the short-term U.S 3-month Treasury Bond Yield (red line).
Source- KOYFIN
By looking at the CNNMarkets Fear and Greed Index we can see that the market is currently entering extreme levels of fear. As uncertainty over the U.S-China trade disputes continue we might see more pressure on the major Equity markets.
Taking a closer look at the chart of the S&P 500 Index we can see the sell-off from the all-time highs as renewed vigour returned to the U.S-China negotiations.
Technically we might see more downside in the short term if the Head & Shoulders Technical pattern plays out which might see the price target the 2720 price level. If the technical pattern does not playout then we might see the price action return to the 2900 level.
Source - Bloomberg
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