30 Year Yield Sets Record Low Amid Heightened Concerns Around Trade

30 year Treasury yield falls below 2% for the first time. Treasurys resumed their rally today, yields plummeting across the curve as bonds once more benefited from a flight to quality. 30 year Treasury yields fell to 1.97%, the first time they’ve ever fallen below 2%. The move came despite better than expected retail sales figures and a positive outlook from Walmart- easing concerns about the US consumer. Despite the continued strength in the economy’s fundamentals, Fed Funds futures now imply a 66% likelihood of at least three more Fed rate cuts by the end of the year.

US stocks shrug off trade concerns, rally on strong retail sales. The strength in consumer stocks outweighed weakness in energy stocks which fell 0.52% on the day. US bank stocks remain challenged, falling 0.65% on the day, but are still up nearly 6% on the year. Tomorrow, markets will get the latest consumer sentiment figures along with housing starts data.

Beijing accuses US of trade violations, promises “necessary countermeasures” to new tariffs. The latest in a seemingly endless war of words between US and Chinese officials rankled markets once more, leading European and Asian equities lower. The VIX or “Fear Index” fell marginally lower on the day, but still remains subdued at 21.18.