by AlexPitti
The Italian services PMI fell to 49.2. Italy has the weakest new business formation in 44 months. 2018 GDP growth estimates for Germany have fallen from 2.5% in March to 1.6%.
Economic slowdowns result in more volatility in the stock market as it creates more uncertainty and increases the probability of a recession. As you can see from the chart below, the shaded bars are noted economic slowdowns by the ECRI. When the bars are shaded, there is more volatility. There have already been 2 corrections during this slowdown. Just because stocks recovered from the latest one doesn’t mean we are in the clear as the index is weakening almost every week.
Leading Index Falls 2.6% (139 Week Low)
Views: