Economic survey shows trade tariffs are weakening the US economy
US stocks traded back and forth between positive and negative territory for most of the trading session. Most sectors were lower on Monday led down by energy shares. Communications bucked the trend. The fear of recession continues to drive market price action and there is now a 70% chance that the Fed will cut interest rates when they meet this month. The risk of a recession is rising, and the main threat to the economy is the Trump administration’s trade war, according to the National Association for Business Economics. There were positive signals that a potential trade agreement could be closed ahead of the arrival of the Chinese delegation this week. The VIX volatility index continues to chop around moving higher by approximately 2.5% on Monday.
The Chinese Trade Negotiators Arrive This Week
The Chinese trade delegation is expected to arrive this week on Thursday and begin to restart trade negotiations. This latest round is just ahead of the next round of tariffs. They were originally planned for October 1 but were pushed back by President Trump. After that, the next round is slated to go into effect mid-December.
The Risk of Recession is Rising Because of Tariffs
The risk of a recession is rising, because of the Trump administration’s trade war, according to the National Association for Business Economics. The Washington-based association of business economists also expects that the Federal Reserve will remain on hold through 2019. The most recent economic survey conducted during the middle of September shows that many analysts see warning signs in the US, as manufacturing activity dropped to more than a 10-year low in September and a sharp slowdown in service-industry growth to levels last seen in 2016.
United Auto Works Continue to Strike Against GM
United Auto Workers’ strike against General Motors continued to weigh on the stock as the union said talks between the sides have taken a turn for the worse. The UAW vice president said GM submitted an inadequate counteroffer to a Saturday night proposal from the union.