- Markets have whipsawed this week on trade-war headlines and fears of slowing global growth.
- An inversion in the most closely watched section of the Treasury yield curve has played a large role. It sent markets into a panic on Wednesday after flashing a recession signal for the first time in 12 years.
- Four money managers weigh in on how the sharp volatility has made their lives more difficult.
- Read more on Markets Insider.
Markets have been on a roller coaster ride lately amid conflicting trade-war headlines and fears of a global slowdown. That volatility has subjected both the equity and bond markets swinging wildly, often within the span of a single day.
Early in the week, stocks took a dive as unrest in Hong Kong rattled confidence in global markets. Those losses were quickly erased Tuesday when all three major US indexes gained on the news that the Trump administration would delay the onset of some of the latest round of Chinese tariffs.
But the positive sentiment was short-lived. The markets pivoted yet again on Wednesday, when weak economic data in Germany and China sent bond investors into a panic, pushing the spread between two- and 10-year Treasurys into negative territory.
That marked the first time since 2007 the most closely watched portion of the yield curve had inverted, flashing a warning signal that had preceded each of the past seven recessions. Major US stock indexes wound up suffering their worst days of 2019, with the Dow Jones industrial average closing 800 points lower.
Markets looked calmer on Thursday after the same part of the yield curve uninverted on news the US and China were talking regularly on trade. Those positive signs seemingly outweighed reports earlier in the day that China would retaliate against President Trump's latest round of tariffs.
But even though Thursday was subdued, investors are still expecting the sharp increase in market-wide volatility to persist through the rest of the summer in the fall. That means it will be a challenging road ahead for money managers, who must weigh slowing growth sentiment and make investing choices accordingly.
For some, that means they'll want to stay away from riskier assets like stocks. However, on the flip side, the current low-yield environment has made it increasingly difficult to find solid returns in the bond market as well. With yields on long-term bonds such as the 30-year Treasury at record lows, its hard to see light at the end of the tunnel any time soon.
Business Insider spoke to four money managers to get insights around how they're weathering the ongoing market storm. Here's what they had to say: