Recession threat dominates market agenda

Donald Trump may have been cleared of conspiring with Russia in the 2016 election campaign, but that has done nothing to boost sentiment in equity markets, with the mounting threat of recession proving far more pervasive. Expectations late last night had been that the news would set Wall Street on fire, but as it stands, positivity is being reigned in by the idea that we’re on the cusp of a global economic slowdown. Major Asian markets closed universally lower with losses of 2%-3% being recorded, and although US equity indices may have at one stage been eyeing a slightly higher start, confidence certainly looks rather thin on the ground for now.

Economic data before the weekend break may have disappointed, but it was the inversion of the US Treasury 10 year yield curve that appears to have been the most significant indicator over the threat of recession. Expect this metric to be closely watched in the days ahead. Economic data in the near term remains thin on the ground and it’s also worth bearing in mind that yesterday’s news from Washington still doesn’t mark the end of the investigation against President Trump.

Ahead of the open, we’re calling the DOW down 2 at 25500 and the S&P down 1 at 2801.