Growth Fears Pressure World’s Stock Markets

Traders shrugged off news that an investigation found no evidence of collusion between US President Donald Trump’s election campaign and Russia. The pound gave up earlier gains to trade lower against the euro and the dollar after Prime Minister Theresa May admitted Monday she still had not secured the votes needed to get her Brexit deal through parliament, again raising the prospect Britain could crash out of the European Union in two weeks’ time.

Dealers have been spooked by growing evidence of a slowdown, after a broad-based rally since the start of the year that was built on hopes for China-US trade talks and a more dovish Federal Reserve. “Concerns over the health of the global economy heat up at a rapid pace,” said analyst Jameel Ahmad at traders FXTM.

With a tendency toward fragmentation in the global economy, it is crucial that the IMF helps members sustain integration for the benefit of all and stands ready to provide support during any future crises. pic.twitter.com/3A3NRuymk2

— David Lipton (@DavidLipton) March 25, 2019

In Europe key stock markets were lower at the close, with London the weakest performer. Wall Street finished a choppy session little changed, with little impact from the conclusion of Special Counsel Robert Mueller’s report which failed to tie Trump and his campaign to conspiring with Russia to influence the 2016 US presidential election. “We have rarely if ever commented on the investigation as it has never been seen as a market moving event,” said Art Hogan, chief market strategist at National.  “We do not see that changing with the release of the findings.”

Apple declined 1.3 percent after product launches that included a game subscription service and a news service, in addition to a subscription streaming service to compete with Netflix, Amazon and other tech giants.

Tokyo’s main stock index was hammered 3.0 percent, while Hong Kong and Shanghai each dived two percent, as concerns festered also over a possible recession in the United States, dealers said. US and European equities had tumbled Friday as the yield on 10-year Treasury bonds fell below those for three-month bills — for the first time since before the global financial crisis.

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This so-called inverted yield curve shows investors are more willing to buy long-term debt — usually considered higher risk — as they consider the short-term outlook more risky. “This development will psychologically encourage further anxiety and rocket fears that the global economy is heading for another downturn, if recent economic releases across the globe have not already provided indications that the downturn has arrived,” said analyst Ahmad. The yield curve is closely watched since it has inverted prior to recessions in recent decades.