FYI: A wild ride for financial markets this week. Just days after the Dow lost more than 800 points and the S&P 500 saw its biggest one-day decline in two months, US stocks tumbled again before finding their footing. On Thursday, the Dow fell as much as 784 points before rebounding, while the S&P 500 clawed back most of its 2 per cent drop from earlier in the day.
There's a running tally of reasons for the sell-off. The arrest of Ms Meng Wanzhou, Huawei's chief financial officer, at the behest of the US for her alleged business dealings with Iran despite sanctions on the country. The hardening stand-off between Washington and Beijing comes on the heels of President Trump's warning shot on Tuesday that he is a "Tariff Man," lest China forget. Then, of course, there's the ever-flattening yield curve, a popular recession signal, with markets wagering that the Federal Reserve may pause its tightening cycle as soon as next year.
Clearly there's a lot of uncertainty feeding through financial markets at the moment. In fact, uncertainty across the global economy has been on the rise since 2012. Lower investment growth and equity returns have cropped up as a result.
Regards,
Ted
https://ftalphaville.ft.com/2018/12/07/1544173943000/Uncertainty-is-killing-growth/
