On the first trading day of the week investors seemed to be concerned about the very real possibility that the Fed may raise interest rates for the first time in over a decade when the FOMC meets for its two day policy session next month. The CME Group reports that that the likelihood of a Fed interest rate hike in December rose from about 58% to nearly 70%.
Meanwhile, A leading global policy organization says there are signs that a new global recession is a possibility. The Organization for Economic Cooperation and Development points to a slow-down in world commerce that could be a harbinger of things to come.
Angel Gurria, Secretary-General of the Organization for Economic Cooperation and Development said:
“Trade figures are “troublesome” because the declining rates of trade seen this year “have, in the past, been associated with global recession. It projects “global trade growth at 2 percent this year, improving to 3.6 percent next year. In only 5 of the past 50 years has global trade grown at 2 percent or less, and each time has coincided with a world economic downturn.”
The Secretary-General of the Organization of Economic Co-operation and Development (OECD) added that contrary to 2 years ago, when slow trade was blamed on advanced economies, now the blame is on emerging markets such as China.
“As China transitions from massive infrastructure investment and manufacturing toward consumption and services, commodity prices have fallen, hurting exporters such as Australia, Brazil, Canada and Russia. New figures released Monday in China highlighted the extent of the downturn: China’s imports fell by %18.8 percent in October from a year earlier, while exports shrank %6.9 percent.”
Here are the final numbers from Monday, 11/9/15 on Wall Street:
Dow Jones Industrial Average: 17, 730.48 (-179.851/ -1.00%)
NASDAQ: 5,095.30 (-51.82 / -1.01%)
S&P 500: 2,078.58 (-20.62 / -0.98%)