In an article in the mainstream media, CNBC, the US bank Goldman Sachs warned of pockets of economic weakness in the US and just may cause financial markets to run scared – with “scared” emphasized. This piece reported that GDP growth could slow to under 2 percent by the end of the year. According to senior multi-asset strategist Christian Bueller-Glissmann, markets will be running scared, and growth is set to slow by next December.
Global equity markets could struggle to come to terms with the economic slowdown while trade tensions will will elevate risk as volatility increases. The sell-off in the US equity market on Monday was attributed to the weaker-than-expected data from the US, China and Japan – globally, there will be challenges. Having been up over 8 percent at one point this year, the Dow is now trading much lower. Non-farm payrolls last month increased by 155,000, below the analysts expectations of 200,000.
Still, the 3-month average is a robust 170,000 while wage increases are trading near a decade high.
Still, with the US, China and Japan seeing weaker economic releases, there will be growing concerns about stock markets in each country. The next big US sell-off could be met with buying in the tech sector, as the sector has been damaged for over 5 months with some stocks down 20 to 30 percent, others even more.