Concern Arises as U.S. Markets Hint at Potential Economic Recession

Prior to the increasing sentiments that the U.S. Market may fall into a business cycle recession, which is a business cycle contraction when growth in consumer spending and economic begins to slow down, the future of the global economy can be attributed to the US/China trade war. Some of the previous incidences with China leading to this trade war include officials being concerned with transferring billions of dollars across seas that could have been used to invest domestically. Not only that, President Donald Trump signed to levy tariffs on $60 billion worth of China’s goods. Consequently, heavy import duties were levied on many Chinese products, from medical devices to weapons. (AP News, 2019)


Source: Statista, Bloomberg, CNN (Seeking Alpha, 2019)

While the President believes his trade policies are in effect, they are also impacting other countries as well. For the United States, the economy has been slowing its economic expansion, in comparison to its last bear session of 2008.

“The fact is that no one actually knows what is next for the markets,” said Fiona Cincotta, senior market analyst at City Index. “However, the signs flashing from the markets are not great.”

All in all, however, this past December was when the S&P 500 Index, which is a group of the top U.S. 500 largest companies and measures their overall performance, was at its lowest ebb ever since the peak of the Great Economic Depression. Many experts forecast that this could suggest a recession, but the United States is currently exhibiting an unemployment rate of 3.7% and wages that are consistently on the rise. At this stage in the economy, other experts suggest that the recession could be coming sooner than expected.

Sources
US recession fears stalk markets as stocks fall again
https://www.apnews.com/6abb572685ed404b97344897fd97285a

Historical Trends of the Macroeconomic Environment for the S&P 500
https://www.macrotrends.net/2324/sp-500-historical-chart-data

Cramer Not Worried about the Incoming Fears of the Recession
https://www.cnbc.com/2019/08/14/cramer-not-worried-about-the-yield-curve-says-buffett-is-buying-banks.html