Global Economic Challenges

Stocks are falling hard this morning, as the growth rate of Covid-19 continues at alarming rates in many states across the country.  Combined with rumors of a second lock down being discussed in areas of rapid growth, investors are showing signs of concern.  However, with the 200 day moving average just beneath current levels, stocks could see a bounce in the near term.  If prices do happen to fall beneath this critical level, you can expect to see a more dramatic drop to come.  Since breakouts are rare, and considering the Fed may step in to help support stocks, odds are that we will see this level hold, at least for now.

The International Monetary Fund (IMF) is projecting the global economy to fall by 4.9% in 2020.  This is a drop from the -2% they had estimated just a couple months ago.  With risks of Covid-19 still a major threat to future growth, we could see this projection worsen over time.

The US is weighing adding $3.1 billion of tariffs on France, Germany, Spain and the UK.  This is fueling the ongoing trade concerns that will certainly impact our economy.  This is not good news for many corporations who rely on products imported from these areas, and could come with retaliatory consequences if enacted.

Bonds remain trading within a very tight range.  Even though stocks are suffering, there is little incentive to float an interest rate.