What's moving markets today: August 7, 2019

By CNN Business

Updated 5:07 p.m. ET, August 7, 2019
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11:48 a.m. ET, August 7, 2019

Now is the time to invest in China, says Bridgewater's Ray Dalio

From CNN Business' Anneken Tappe

The head of the world's largest hedge fund is bullish on China.

Ray Dalio of Bridgewater Associates thinks the time is right to invest in the Far East.

In a Bridgewater YouTube video, Dalio described China as an emerging powerhouse that is opening up to global investors.

"Now is the time that it's opening up, and you can be early or you can be late," Dalio said.

Index provider MSCI is quadrupling the weight of Chinese large-cap stocks this year, which will give index investors further access to those stocks. China's yuan-denominated bonds have also been added to the Bloomberg Barclays Global Aggregate Index.

"I do think there'll be a restructuring of the world order," in terms of supply chains and trade, he said.

While China has its own set of idiosyncratic risks, it is less or at least no more risky than other markets, Dalio said.

And riskiest of all is not to be diversified.

10:50 a.m. ET, August 7, 2019

Nervous? Here's where to park your money

From CNN Business' Paul R. La Monica

The Real Estate Select Sector SPDR (XLRE) and Utilities Select Sector SPDR (XLU) ETFs have held up relatively well in the past week.

Big telecoms that pay giant dividends, such as Verizon (VZ) and CNN parent company AT&T (T), may also be safer places to hide if the broader market remains this volatile.

Charlotte Geletka, managing partner with Silver Penny Financial Planning, also said that investors who want to save must broaden their horizons.

Stocks may seem risky, but the alternative is putting your money in assets that will generate little, if any, return.

"We have a lot of clients with cash. Many of them still have PTSD from the 2008 and 2009 crisis. But we're trying to urge people to add more risk," Geletka said.

If you are trying to plan for retirement, you will need some growth. You can't push everything into bonds and cash."

Read more here.

10:41 a.m. ET, August 7, 2019

New tariffs will cost the tech industry $1 billion

From CNN Business' Clare Duffy

A new round of tariffs announced by President Donald Trump last week will hit the technology industry especially hard. 

The 10% tariff on an additional $3 billion in Chinese goods set to go into effect in September would include dozens of consumer tech products, including smartphones, laptops, printers and speakers. That increase would bring the total amount of tariffs paid by the tech industry up to $2.7 billion from the $1.7 billion paid in June, which was already eight times higher than the amount paid in June 2018, according to data released Wednesday by the Consumer Technology Association. 

That will mean higher prices for US consumers buying tech products, CTA President Gary Shapiro said. This could be especially harmful to technology companies as they head into the second half of the year when holiday spending is generally an important revenue driver. 

10:41 a.m. ET, August 7, 2019

Bond yields are collapsing around the world

From CNN Business' Matt Egan

Another sign of anxiety: A startling rush of money into bonds.

As demand for bonds grew the 10-year Treasury yield took a nosedive on Wednesday, sinking below 1.63%. That means the benchmark rate has been basically cut in half since last fall, reflecting a movement into safe investments and mounting expectations of more easy money from central banks.

It's not just a US bond market phenomenon. Germany's 10-year bond rates tumbled deeper into negative territory, reaching a remarkable -0.6%.

That means investors, who usually get interest, are instead paying holders of German bonds to park their money. Government debt in Switzerland and France dropped further into subzero territory as well.

Peter Boockvar, chief investment officer at Bleakley Advisory Group, wrote in a note to clients that the drop in yields is "getting scary."

He added:

The already epic global bond bubble continues to inflate further."
9:59 a.m. ET, August 7, 2019

Gold climbs to six-year high

Fromm CNN Business' Matt Egan

Frazzled investors are rushing to buy gold and government bonds as fears of a global recession, sparked by a trade war, grow more real.

The push into safer investments lifted US gold futures briefly above $1,500 per ounce on Wednesday for the first time in more than six years.

US Treasury yields, which move opposite price, collapsed to levels unseen since just before President Donald Trump's 2016 election.

Searching for safe places to put their money, investors have flocked to gold, which tends to do well during times of uncertainty.

"There is clearly some safe haven bid for gold," Win Thin, global head of currency strategy at Brown Brothers Harriman, told CNN Business. "But it's certainly not coming from the inflation hedge angle."

Read more here.

9:45 a.m. ET, August 7, 2019

Dow tumbles 400 points

From CNN Business' Anneken Tappe

US stocks dropped at the opening bell on Wednesday, on track to erase Tuesday’s gains.

It has been a volatile week, with stocks recording their worst day of the year on Monday, before rebounding on Tuesday. The CBOE Market Volatility Index (VIX) rose more than 12% Wednesday.

  • The Dow opened 1.3%, or 335 points, lower, before falling more than 400 points.
  • The S&P 500 and the Nasdaq Composite kicked off 1% lower. Both extended their losses in the first minutes of trading

US Treasury yields tumbled, with the 10-year yield near three-year lows at 1.6282%.

Amid the uncertainty in the markets and on the trade front, as well as concerns about global growth, gold prices rallied. Prices for gold are up 1.7% on Wednesday, nearing $1,500 per ounce, its highest level since 2013.

9:09 a.m. ET, August 7, 2019

Dow set to tumble 300 points at the open

From CNN Business' Anneken Tappe

The Dow and the broader US stock market are headed for another wild day on Wednesday.

After a one-day respite, panic has reignited over trade. The 10-year US government bond yield tumbled near a three-year low of 1.6298%, as investors pour money into bonds out of fear the trade war could stunt global growth.

Gold was also a big winner Wednesday as investors sought safe assets. Prices edged toward $1,500 an ounce for the first time since 2013. Gold is up nearly 17% this year and rose 1.4% on Wednesday.

Futures for the Dow (INDU) are down 0.5%, while those for the S&P 500 (SPX) and the Nasdaq Composite (COMP) are 0.5% and 0.4% lower, respectively.

6:30 a.m. ET, August 7, 2019

Today on 'Markets Now'

From CNN Business' Paul R. La Monica

The stock market has been on a roller coaster ride lately, as investors focused on every twist and turn in the fraught economic relationship between the United States and China.

But Brian Belski, chief investment strategist with BMO Capital Markets, thinks Wall Street is overreacting.

He argues that if investors take a long-term view, they'd see that the economy and corporate earnings are still expected to grow at a healthy clip. After all, interest rates, inflation and the unemployment rate all are low.

Belski will talk about this with CNN Business correspondent Alison Kosik on the "Markets Now" live show Wednesday at 12:45 pm ET. 

Read more here.

6:31 a.m. ET, August 7, 2019

Disney on the decline

From CNN Business' Julia Horowitz

Investing in streaming is expensive.

Disney (DIS) said after the bell on Tuesday that its revenue increased 33% during the three months ending in June, bolstered by its direct-to-consumer business that includes Hulu and blockbuster hits such as "Toy Story 4" and "Avengers: Endgame."

But profits fell 51% as the company prepares for the launch of its new streaming service, Disney+, in November. Disney said it will offer a bundle that includes Disney+, ESPN+ and commercial-supported Hulu for $12.99 a month.

Shares fell 3% in premarket trading.