Stocks rally | China playing the long game | How low can bond yields go?

If Deutsche Bank has it right, those on Wall Street might not want to hold their breath for a trade war solution.

VIEW IN BROWSER | SUBSCRIBE WED, AUG 28, 2019 EVENING BRIEF AS OF WED, AUG 28, 2019 • 04:00 ET DJIA 26035.42 +1.00% +257.52 S&P 500 2887.97 +0.66% +18.81 NASDAQ 7856.88 +0.38% +29.94   Most Active DOW NAME LAST CHG %CHG PFE 35.08 +0.74 +2.15% MSFT 135.56 -0.18 -0.13% AAPL 205.53 +1.37 +0.67% S&P 500 NAME LAST CHG %CHG AMD 30.78 +0.58 +1.92% GE 7.94 +0.01 +0.13% BAC 26.86 +0.39 +1.47% NASDAQ NAME LAST CHG %CHG AMD 30.78 +0.58 +1.92% ADSK 140.08 -10.13 -6.74% SIRI 6.13 +0.07 +1.16% EDITOR'S NOTE Stocks ended Wednesday on a high note, but the gains were capped thanks to a key part of the U.S. yield curve inverting and adding to fears of a recession.     Traders have also been closely watching (and reacting to) trade war developments between the world's two largest economies. But if Deutsche Bank has it right, those on Wall Street might not want to hold their breath for a solution.     China is gearing up for a battle that could last as long as the U.S.-Japan trade war in the 1980s, which spanned more than a decade, according to Yi Xiong, China economist at Deutsche Bank. In a note to clients Wednesday, Xiong said the time horizon China is getting ready for may go well beyond the lifecycle of the current U.S. administration.     President Donald Trump shocked markets by abruptly ending a trade truce earlier this month and announcing a 10% tariff on $300 billion of Chinese goods. China retaliated with smaller tariffs ranging from 5% to 10% on $75 billion in U.S. goods. That move by China was not to maximize damage, but to "disincentive further U.S. tariffs," Xiong said.  In the past year, the trade war has morphed into a technology war with tariffs as a tool for Trump to get leverage on other issues including currency manipulation and agriculture buying, CNBC's Yun Li writes. The Trump administration blacklisted Chinese telecom giant Huawei for national security concerns and halted its ability to purchase U.S.-made chips, while Trump claimed that China failed to buy U.S. farm goods "in large quantities" as it had promised.    As Deutsche Bank's Xiong put it, "frictions between the US and China have gone far beyond trade, reducing China's potential gains in a trade deal" and if China had "hoped before that resolving the trade war could help improve overall U.S.-China relations, that hope is largely gone."  Kate Rooney | CNBC Markets Reporter @Kr00ney TOP NEWS  Dow jumps as oil prices boost energy shares Why record low bond yields could keep heading lower as market fears 'disaster scenario' The Fed's efforts to stay out of politics just got a lot tougher this week US 30-year bond yield falls to record low under 2% as global recession fears grow Homeowners are sitting on a record amount of cash, but they're not really tapping it New recession warning: The rich aren't spending Peloton is selling tons of bikes, but the biggest risk to its IPO may be the looming music industry Art Cashin says S&P 500 may need to drop as much as 2% to get the market back to 'an honest rally' Ron Insana: This time is not different for the inverted yield curve Economist Jim O'Neill warns the US may be too dependent on consumers, like in 2008   CNBC PRO American Airlines stock cratered this month but upside may follow, says JP Morgan     TOP VIDEO Greycroft's Patricof: Dual-class structures create barrier to social progress   SPECIAL REPORTS Nike could surge back to records within a month, trader says One of the best-performing staples stocks this month could get even hotter   Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel Digital Products Feedback Privacy Policy   © 2019 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS