Global Markets Drop Over Worries About U.S. and European Economies
Mon Mar 25 2019
Lucy Harlow (2352 articles)

Global Markets Drop Over Worries About U.S. and European Economies

Global markets largely took a tumble on Monday, with worries about a possible U.S. recession. Japan’s Nikkei 225 index was was down 3%. The Shanghai composite was off almost 2%, as was Hong Kong’s Hang Seng, with the Shenzhen composite down 0.9%.

European stocks had dropped on Friday because of a batch of bad regional economic news. Shares continued to drop on Monday, but losses moderated.

Another concern on Friday was news that long-term government bond interest rates were below those of short-term bonds. The condition called a yield curve inversion. It means investors are uncertain about the future and, instead, focusing more on short-term strategies, creating a lack of confidence that often proceeds, but doesn’t guarantee, a recession.

In all, the effect of all the bad news worries investors. There’s been growing pessimism for some time, as no economy ever grows without stop or setback. In the mid December, a global survey of chief financial officers found an overwhelming majority that expected a recession by 2020 at the very latest.

And a new survey released on Monday by the National Association for Business Economics found that U.S. economists expect that real growth will drop from 2.9% in December to 2.4% in 2019 and 2% in 2020.

The panel, though, was less bullish on an actual recession. They saw the odds of a 2019 recession of about 20% and one by the end of 2020 at 35%. The Federal Reserve’s softening of talk about interest rate hikes back in January were the reason.

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Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe