US stocks steady after plunge but caution still reigns

NEW YORK — Stocks around the world remained stuck in the spin cycle Thursday, as worries about a possible recession collided with hopes that the strongest part of the U.S. economy — shoppers spending at stores and online — can keep going.The S&P 500 flipped between modest gains and losses in morning trading, a day after it plunged to one of its worst losses of the year after the bond market sent out a fairly reliable warning signal of recession. Stocks from Tokyo to London, meanwhile, sank after China said it would take “necessary countermeasures” if President Donald Trump follows through on a threat to impose tariffs on more than $100 billion of Chinese goods on Sept. 1.The U.S. bond market, which has been among the loudest and earliest to cry out warnings about weaker economic growth and inflation, also continued to show concern as yields fell.In the U.S., Walmart shares surged 5% and helped to steady the market after it said it made a bigger profit in the last three months than Wall Street expected, thanks in part to strong online sales of groceries. A separate government report also showed that retail sales were stronger than economists expected last month.The S&P was up 0.3%, as of 9:56 a.m. Eastern time, after flipping between a loss of 0.2% and a gain of 0.5%. A day earlier, it plunged nearly 3%.The Dow Jones Industrial Average rose 92 points, or 0.4%, to 25,572, and the Nasdaq composite gained 0.2%.Consumer spending makes up the bulk of the U.S. economy, and shoppers have been carrying the economy recently amid worries that businesses will pull back on their spending due to all the uncertainty created by the Trump administration’s trade war with China. Other economies are slowing as the trade war is doing damage to manufacturers around the world.Those concerns helped drive the yield on the 10-year Treasury to 1.56% Thursday, down from 1.58% late Wednesday and from more than 3% late last year. The 10-year yield has sunk so much that it dropped below the yield of the two-year Treasury Wednesday, a rare occurrence and one that has historically suggested a recession may be a year or two away.The 30-year Treasury yield fell to 2.01% from 2.02% and earlier dropped below 2% to a record low, a sign of concern among investors. When worried about weaker economic growth and inflation, they tend to pile into Treasurys, which pushes up their prices and in turn pushes down yields.The trade war isn’t the only worry for investors. The United Kingdom’s pending exit from the European Union, political unrest in Hong Kong and a totally separate trade war between South Korea and Japan are all adding to the gloom.“The countdown to a recession has just started,” said Hussein Sayed, Chief Market Strategist at FXTM.The worries have pulled the S&P 500 down 4.4% so far this month, while other markets are down even more sharply. The S&P 500, though, remains within 6% of its record set late last month.“The fact is that no one actually knows what is next for the markets,” said Fiona Cincotta, senior market analyst at City Index. “However, the signs flashing from the markets are not great.”In Europe, Germany’s DAX sank 1.1%, while France’s CAC 40 lost 0.7%. The FTSE 100 in London dropped 1.4%.Japan’s Nikkei 225 fell 1.2%, and the Hang Seng in Hong Kong rose 0.8%.Commodity prices, which have been swinging sharply on worries that a weaker global economy will dent demand, were lower. Benchmark U.S. crude fell 93 cents, or 1.7%, to $54.30 per barrel. Brent crude, the international standard, lost $1.49, or 2.5%, to $57.99Stan Choe, The Associated Press read more

South Africa calls for level playing field in post2015 development agenda

South African President Jacob Zuma today urged a level playing field for his continent in setting a new global development agenda for the years following the end of the current cycle in 2015, warning that new international demands were impeding Africa’s development.“We raise this point…because it appears that the global economic meltdown has brought about new developments that are detrimental to the developing world, especially Africa,” he told the United Nations General Assembly on the first day of its annual General Debate, citing a tendency to renegotiate the “rules of the game.”“New issues are being introduced as prerequisites for development and partnerships which in fact become huge non-tariff barriers. These include the green economy and clean technology,” he said, noting that while these issues are important and need to be addressed, the manner in which they are crafted restrains economic development as they are used as obstacles.The year 2015 is the deadline for achieving the Millennium Development Goals (MDGs) that set specific goals on poverty alleviation, education, gender equality, child and maternal health, environmental stability and HIV/AIDS reduction, and Assembly President John Ashe has said the current session of the Assembly must lay the groundwork for global development in the decades beyond.Mr. Zuma said such an agenda allows individual regions and States the space to address the development needs peculiar to their circumstances and priorities. For Africa in particular, it should address poverty eradication, income inequality and job creation, focusing on all three dimensions of sustainable development – eradication of poverty through economic development, social development and environmental sustainability.“Any development agenda beyond 2015 must be based on the principle of common but differentiated responsibilities in order to equalize the international playing field,” he stressed. As he and many other leaders of developing countries have done in the past, Mr. Zuma called for reform of the Security Council by 2015 so that the currently 15-member body democratically represent the world’s nations at large.“The UN Security Council still remains undemocratic, unrepresentative and unfair to developing nations and small States, and disenfranchises the majority of the Member States of the United Nations who form the majority in this General Assembly,” he said. “We cannot remain beholden indefinitely to the will of an unrepresentative minority on the most important issues of international peace and security.“There has been too much talk about the need for reform, with too little action. We would like to challenge the Assembly today: Let us set ourselves the target to celebrate the 70th Anniversary of the United Nations in 2015 with a reformed, more inclusive, democratic and representative UN Security Council.”In an earlier meeting with UN secretary-General Ban Ki-moon, Mr. Zuma discussed political developments in the Southern African Development Community (SADC) region, especially Zimbabwe and Madagascar. They also focussed on Guinea-Bissau and the Central African Republic, according to a readout issued by Mr. Ban’s spokesperson. read more