US GDP had its worst fall on record in the second quarter. It shrank by 9.5% from the previous quarter, a 32.9% slump in annualised terms. “That is... the equivalent of the first three years... of the Great Depression accelerated into just three months”, says Tim Price of Price Value Partners.
GDP is a backward-looking indicator, but US weekly jobless claims have increased for two weeks running as the virus has forced renewed closures in southern states, says Alexandra Scaggs for Barron’s. The bond market is now sending a “warning signal” about the recovery, says Giles Coghlan on fxstreet.com. The yield on US ten-year Treasury bonds hit its lowest level since early March last week, while three- and five-year yields hit new record lows. Bond yields move inversely to prices, so falling yields imply gains for bondholders.
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