Uncertainties cause turbulence on the stock markets

Published on: 07-Oct-2019
Category: Trading
Last updated: 16-Oct-2019

Uncertainties cause turbulence on the stock markets

Worries about a possible recession have caused weak price developments internationally. The Dax lost 3% last week, losing profits in September. The US Purchasing Managers Index (ISM) also fell to its lowest level since the financial crisis, showing the impact of trade disputes and the slowdown in the economy.

The trade war between China and the United States has lost some of its relevance, as talks will resume on Thursday after a long time. Positive results of the talks are expected by December. So while the situation between China and the US calms down, a new trade conflict between the EU and the US is imminent. New punitive tariffs could scare off investors.

Political decisions will also affect share prices in October and this week. An impending impeachment trial of Trump is becoming more likely through more and more revelations, though Republicans will continue to stand behind the president, experts suggest. The implementation of Brexit at the end of October has not yet been finally clarified. Boris Johnson has made a proposal to the European Commission, which it does not accept. In the US, a further interest rate cut by the central bank is becoming more and more likely. At the end of October, further developments will be decided at a meeting of the Fed. On Wednesday, the Fed minutes will be published, in which internal discussions could provide information on a possible rate cut. Throughout the week, US inflation data and US consumer confidence at the University of Michigan will be released, indicating the likelihood of a rate cut.

The biggest fear of investors this month will therefore be the uncertainty over the further political development.


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