Market Update: Fears of Recession Are Impacting Broader US Markets. What Investors Should Know About?

  • Aug 15, 2019 AEST
  • Team Kalkine
Market Update: Fears of Recession Are Impacting Broader US Markets. What Investors Should Know About?

As the market players are aware, the economic uncertainties have the potential to severely impact the broader stock markets and it can be said that, in the current environment, the global investors fear the possibilities of recession. The hints about the global economic slowdown might prompt the investors to sell their stock holdings and some market players might even decide to avoid make deployments towards the equity asset class. The investors might go for deployments towards safer assets.

It looks like that, in the present environment, the trade battle between the US and China is the primary concern, which is weighing over the sentiments of the global market players as well as the broader stock markets. The investors need to note that they should also keep a close check on the bond markets as well. On August 14, 2019, Dow Jones Industrial Average witnessed a significant fall of 800.49 points or 3.05% on an intraday basis to end the session at 25,479.42. Also, S&P 500 Index fell by 85.72 points or 2.93% to settle at 2840.60.

Global Slowdown Might Influence Oil Prices

The demand of oil is sensitive to the macro-economic conditions and to the overall health of the global economy. If oil demand gets affected, the prices of oil might also be influenced. The trade battle between the US and China could lead to a global downturn, which could affect the oil prices. The economic uncertainties could be detrimental to the global business environment. It can be said that the companies which are having global operations are more exposed to the risks posed by the trade war.

Trade Worries Might Impact the Australian Economy

The trade battle between the US and China could negatively impact the broader Australian economy and can also weigh over the sentiments of Australian investors. The global business environment can influence the performance of the Australian economy. Needless to say, equity markets in Australia can witness negative impacts if the global slowdown weighs over the performance of the Australian economy. The fears of recession have the potential to significantly impact Australian equities. Telstra Corporation Limited (ASX: TLS) released its FY 2019 results and it was added that the company’s total income, EBITDA and NPAT was in line with the anticipations. Super Retail Group Limited (ASX: SUL) also released its FY 2019 results in which its total sales witnessed a rise of 5.4% on the pcp basis to $2.71 billion.

Some of the other Australian companies would be releasing their results in the month of August 2019. The investors need to track such earnings as it might give them an idea as to how the macro-economic environment could influence the company’s business activities.

For the investors, we have provided some important information about the companies and we advise the investors to have a brief overview of the same. We have written some recent financial updates on 2 Industrial stocks (i.e., AZJ, RWC) and, in order to have a look, please click here.

TLS Daily Technical Chart (Source: Thomson Reuters)


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