- Dow Jones Industrial Average (DJIA) futures dropped 118 points ahead of the bell on Wednesday.
- Ratings agency Moody’s issued a ‘recession triggers’ chart with 16 high-risk events.
- The European Central Bank (ECB) also issued a warning over global growth.
Dow Jones Industrial Average (DJIA) futures plunged 118 points in early trading Wednesday, pointing to a weak stock market open. As US-China talks disintegrate once again, Moody’s issued a gloomy assessment of the economy going into 2020.
In a note to investors, Moody’s chief economist Mark Zandi revealed a list of 16 events that could trigger a recession. Top of the list, as you might expect, is the ongoing trade war between US and China. If economic stagnation persists, Zandi warned that unemployment will quickly follow.
Zandi, speaking to Market Watch, said:
Recession risks for next year remain uncomfortably high. The economy is barely growing at its potential, which means unless growth picks up soon, unemployment will begin to rise.
Dow futures in triple-digit plunge
Dow futures contracts dumped 118 points as of 5.12 am ET. Wall Street looks set to extend yesterday’s miserable trading session amidst a backdrop of US-China trade war confusion.
S&P 500 futures and Nasdaq Composite futures fell 0.38% and 0.42% respectively. Bitcoin also traded lower at $8,068.
Recession risks, ranked according to risk and severity
Zandi ranked the recessionary triggers according to their likelihood and their potential impact on the economy. He ranks global trade war escalation at the top, both highly likely and severe in its impact.
He added:
If the president follows through on his threat to raise tariffs again on China in December, a recession next year is likely. However, if the president stands…
