Fears of a global economic slowdown reached Wall Street today. The Dow Jones Industrial Average dropped 800 points during trading today. It was the fourth largest point loss on record, and by far the worst of 2019. It was a perfect storm of news and events that came together to wreak havoc on Wall Street today. Reports of the slowest Chinese industrial production rate in 17 years, and that Germany’s economy actually shrank last quarter fed into fears of a coming global recession. Yet what really sank Wall Street today was the inverted yield curve, which historically signals an approaching recession. Just when that recession may arrive is unclear. It could be within months, or up to two years off in the distance. Asian and European markets also suffered considerable losses.
The current geopolitical climate, and the impact of the US-China trade war also played a key role, and will continue to. Aside from the trade war currently underway, Hong Kong, and Iran are two areas investors are watching carefully. Events earlier this week in Argentina are also on investors minds. A loss by the incumbent president in the primary election touched off a near economic route and brought forward investor concerns that Argentina could default on its IMF loans at some point in the coming year.