The end of 2018 has spelled a lot of market uncertainties and there are signals warning for an upcoming recession. The US-China Trade War has caused a lot of uncertainty for investors, ensuing in a sell-off this Christmas. Events such as President Trump discussing the dismissal of the US Central Bank chairman Jerome Powell and the current partial shutdown of the US government all add fuel to the flames.
Mr. Trump has continuously bragged about the Wall Street climb during his first year as president but has now called out the Federal Reserve as a problem in the US economy.
Furthermore, the Nikkei index went down 5% today before closing, which is the worst since April 2017. The Nikkei index has dropped 21% peak from October. Other South-Easter indexes fell, and the US stocks had their worst Christmas ever.
Has the bubble raptured? It is difficult to say. One thing is certain; that uncertain investor will not find reassurance at Washington this winter. As stocks continue to fall, the investors’ insentient worsen and thus we arrive in a disastrous spiral.
I hope trust will re-establish over this overreaction, but as more investors continue selling and bunker under bonds and cash, we might fall in at the start of the next recession this Christmas.