A rainy monday

Representation of global markets
Representation of global markets

The markets are taking a battering. A quick view of the global stock markets shows everything in the red. The best performing index as of writing is Tehran at -0.35%, the worse performing is Bombay at -6.76%.

My post previous to this one talked of the merits of the USA economy and the unlikelihood of a US recession in 2015. However it looks like investors and traders might be moving towards creating this recession, which some financiers have been discussing.

Why is the market falling?
China has been disappointing, growth figures are low, the stock market is having to be propped up (rather unsuccessfully) by the government and as a consequence of the devaluation of the yuan global traders are worried about the demand for their products in China.

The sell off began a few weeks ago and is picking up pace. As stocks plunge further this could deteriorate American wealth and put a halt on spending; in turn corporate profits fall and unemployment rises.

Could the global market sell off cause a USA recession? Could it happen before the end of the year? Current data suggests not, but this sell off is happening fast.

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