Stocks fell sharply Wednesday after the bond market raised another warning flag on the economy.
The yield on the 10-year Treasury briefly dropped below the two-year Treasury’s yield Wednesday morning for the first time since 2007. The so-called inversion has correctly predicted many past recessions and is the loudest warning bell yet about a possible recession ahead.
Investors responded by dumping stocks, more than erasing gains from a rally the day before. The Dow Jones Industrial Average dropped more than 700 points in afternoon trading. Banks and tech stocks fell sharply, and retailers came under especially heavy selling pressure after Macy’s issued a dismal earnings report and cut its full-year forecast.
Volatility has returned to the markets in August amid rising tensions in the trade dispute between the U.S. and China. The S&P 500 is down more than 4% as investors fear a prolonged trade dispute could further weaken the global economy.
Traders tend to plow money into ultra-safe U.S. government bonds when they’re fearful of an economic slowdown, and that sends yields lower. When long-term yields fall enough, market watchers see it as a prediction that a recession could be on the way in a year or two. The yield on the 10-year Treasury has dropped from 2.02% on July 31 to below 1.60%. The 30-year Treasury yield also hit a record low Wednesday.
Economic data from two of the world’s biggest economies added to investors’ fears. European markets fell after Germany’s economy contracted 0.1% in the spring due to the global trade war and troubles in the auto industry. In China, the world’s second-largest economy, growth in factory output, retail spending and investment weakened in July.
“The bad news for global economies is stacking up much faster than most economists thought, so trying to keep up is exhausting,” Kevin Giddis, head of fixed income capital markets at Raymond James, wrote in a report.
DES MOINES, Iowa — U.S. Rep. Steve King on Wednesday defended his call for a ban on all abortions by questioning whether “there would be any population of the world left” if not for births due to rape and incest.
Speaking before a conservative group in the Des Moines suburb of Urbandale, the Iowa congressman reviewed legislation he has sought that would outlaw abortions without exceptions for rape and incest. King justified the lack of exceptions by questioning how many people would be alive if not for those conceived through rapes and incest.
“What if we went back through all the family trees and just pulled out anyone who was a product of rape or incest? Would there be any population of the world left if we did that?” King asked, according to The Des Moines Register, which covered the event. “Considering all the wars and all the rapes and pillages that happened throughout all these different nations, I know that I can’t say that I was not a part of a product of that.”
He added: “It’s not the baby’s fault for the sin of the father, or of the mother.”
Several Democratic presidential candidates criticized King’s comments and urged people to contribute to Scholten’s campaign.
“You would think it would be pretty easy to come out against rape and incest,” one of the presidential candidates, Pete Buttigieg, said in a statement. “Then again, you’d think it’d be pretty easy to come out against white nationalism.”
The nine-term Republican congressman, who represents a sprawling, largely rural 39-county district, has been criticized repeatedly for comments he’s made over the years, especially on issues related to race and immigration.
Shortly before the November 2018 election, The Washington Post reported that King met in Austria with the far-right Freedom Party, a group with Nazi ties. King said the meeting was with business leaders, including one person from the Freedom Party, but the newspaper stood by its story.
Soon after the election, King was quoted in a New York Times story saying, “White nationalist, white supremacist, Western civilization — how did that language become offensive?”
MONTGOMERY, Ala. — Sixteen states and several major cities are opposing a lawsuit by the state of Alabama that would have the U.S. Census count only U.S. citizens and legal residents.
New York, California and 14 other states have asked to intervene against Alabama’s lawsuit.
The cities and states argued in a Monday court filing that the Constitution requires an actual enumeration of the population, which means all people regardless of their citizenship or legal status. The Census count is used to determine congressional representation and dole out federal funds.
Alabama sued last year, arguing that the U.S. Commerce Department’s longstanding practice of including all U.S. residents regardless of immigration status unfairly shifts power to states with more undocumented immigrants.
Federal safety officials have banned some Apple laptops from airline flights after Apple recalled the batteries because they could catch fire.
The Federal Aviation Administration said in a statement Wednesday that it alerted airlines last month about the recall involving batteries for some Apple MacBook Pro laptops.
Under FAA policy, some potentially dangerous items including lithium batteries can’t be carried on board or placed in checked baggage if they are under a safety recall. The item must be repaired, replaced or made safe by a manufacturer-approved method before going on a plane.
On its website, Apple says a “limited number” of 15-inch MacBook Pros sold mostly between September 2015 and February 2017 have batteries that might overheat and pose a fire risk. Apple says it’s replacing affected batteries for free.
— The Associated Press