Friday’s global stock markets were down again, and overall forecasts are predicting an uncertain future on the horizon for trade in general.
Despite a recently agreed-upon 90 day truce between the US and China that ceased a number of tariffs in both countries, tensions and uncertainty are scaring investors and threatening to turn the robust US economy on its head. A Reuters poll put the chance of a US recession in the next two years at 40%, the highest chance its given since a few months before the 2008 recession, when the eerie prediction became all too real. This will most likely mean a shift in the actions taken by the Federal Reserve, which raised interest rates this year to combat another growing problem in the US, inflation.
China is seeing its own issues with its economy, some as a result of the trade climate with the US, others in their retail and consumer markets. Both retail revenues and industrial output are growing at lower rates than expected, with retail the lowest since 2003, and industry output at a three year low. Europe’s PMIs indicate a slowdown as well, with 2018 ending a reported 4 year low in growth in many sectors. France is struggling amid recent protests that slowed manufacturing below the mark that indicate a reduction, and Germany barely remained in the positive after its eight drop in manufacturing overall.