International trade seems to be running out of steam. Even developed countries signal looming recession. Investors lack confidence as the global economy reveals signs of a slowdown. Sluggish worldwide trade confirms investors’ fears. Remarkably, financial markets used to benefit from economic headwinds as a downturn in any economy prompts a central bank to pursue loose monetary policy which means low interest rates and massive monetary stimulus. Interestingly, despite troubles in domestic economies companies reported decent revenues. Nowadays, an economic slowdown affects corporate earnings which have broadly declined for the first time since 2016. Most experts foresee lower returns per share in the global stock market in Q1 2019 compared to a reporting period a year ago. Thus, it would be a good idea to keep track of the economic calendar that will shed light on prospects on the equity market in the short term.
US President Donald Trump is viewed as the main threat to the global economy and trade. His protectionist rhetoric sparked off a battle of tariffs with China that later worsened into a full-blown trade war. China’s economy has been losing momentum. As a result, Beijing has devised stimulus measures to ensure at least the current moderate pace of economic growth. The whole eurozone and Germany in particular have been involved in large-scale trade with China. No wonder, Europe has already suffered a fallout from the trade conflict. Germany’s industry has been contracting for four months in a row. Its performance is even worse than during the debt crisis which struck Europe in 2009 – 2012.
