“Markets hate uncertainty. It’s a well-worn truism that is trotted out every time the pound plunges on the latest Brexit twist or stocks swoon on another Twitter tirade from Donald Trump.
“But one index empirically shows that businesses and investors are facing a level of uncertainty never seen before and that could be hurting the world economy.
“The Global Economic Policy Uncertainty Index, devised by a trio of professors under the names Baker, Bloom & Davis, has surged to its highest level since it began in 1997.
“The policies of the US and Chinese, in particular, are at their most volatile ever while the UK gauge has been elevated since the EU referendum.”
“U.S. equity markets on Wednesday were ensnared in a two-day tailspin that has pushed the benchmark indexes to one of the worst starts to a quarter since the 2008-09 financial crisis.
“The Dow Jones Industrial Average DJIA, -1.86%, was down more than 500 points, or 1.9%, at 26,078, with a two-session skid of more than 3%, representing the worst start to a quarter since the last three months of 2008.”
“The Reis data published on Thursday, which track 77 metro areas, show 9.4 per cent of units [in US malls] were empty in the third quarter — equalling a post-financial crisis high reached in 2011…”
“The last slump in oil and gas drilling contributed to the mid-cycle economic slowdown in 2015/16, which helped fuel the political discontent that resulted in the election of populist President Donald Trump to the White House.
“Now the pattern risks being repeated as oil and gas companies cut back on new well drilling and completions in response to lower oil prices, with ripples felt throughout the entire supply chain.”
“The UK has set the EU a deadline of just two days to begin intensive talks on Boris Johnson’s new Brexit proposals, risking a new rupture in relations with Brussels.
“Stephen Barclay, the Brexit secretary, said negotiations had to “move forward at pace”, with the crucial summit at which an agreement must be reached just two weeks away.”
“The construction sector activity in the UK continued to deteriorate last month, the latest survey report from Markit Economics showed this Wednesday.
“The final Purchasing Managers’ Index (PMI) came in at 43.3 in September, down sharply from 45.0 recorded in August and missed the consensus estimates pointing to a reading of 45.0 [sub 50 denotes contraction].”
“German private sector activity shrank for the first time in 6-1/2 years in September as a manufacturing recession deepened unexpectedly and growth in the service sector lost momentum, a survey showed on Monday.”
“Euro zone business growth stalled in September as an ongoing contraction in manufacturing activity is increasingly affecting the services industry, according to a survey which showed little chance of an improvement this month.”
“Growth in the United Arab Emirates’s non-oil private sector slowed to a nine-year low in September, amid record low new orders reflecting soft demand, a survey showed on Thursday…
“New orders were at the softest they have been since the survey began more than 10 years ago, demonstrating weak demand in the country’s non-oil economy.”
“India’s banking sector has been going through a rough patch for the last five years. The number of non-performing assets (NPAs) has sky-rocketed. At its peak, the gross NPA to advances ratio exceeded 11 per cent.
“Until the NPA crisis hit, banks contributed more than 90 per cent of the economy’s commercial credit. As a result, any impairment of banking has a deep and long-lasting impact on the economy.”
“Once a poster child for China’s regional banks, Bank of Jinzhou became the centre of storm in the country’s banking industry, undermining confidence in the sector in the process.
“Beijing came swiftly to the rescue, with the asset management arm of the Industrial and Commercial Bank of China saying at the end of July it would spend up to 3 billion yuan (US$419 million) to recapitalise the lender…
“But it appears the state funds are not enough for the troubled lender.”
“One of the engines that drove a global economic recovery after the last two downdrafts in America – the relatively shallow one in 2001 and the catastrophe that began in 2007 – was China. As the financial crisis escalated, Beijing opened a floodgate of credit and cut interest rates, which stoked demand for everything from Australian coal to German cars.
“We’re unlikely to see anything like that this time. Beijing has shown little appetite for another round of massive fiscal stimulus…”
“The Reserve Bank of Australia could be forced into unconventional policy measures such as money printing to save the economy from stagnation if its latest round of interest rates cuts fail to stimulate growth, economists have warned.
“After cutting the cash rate for the third time this year on Tuesday to a fresh record low of 0.75%, the central bank warned that there could be more cuts to come…”
“Data released by the Federal Chamber of Automotive Industries (FCAI) on Thursday showed total sales for September skidded nearly 7% to 88,181 vehicles from a year earlier. For January-September were down about 8% from the same period in 2018.
“The weak data will disappoint the Reserve Bank of Australia…”
“Argentine economists forecast a deeper recession and maintained a pessimistic inflation forecast at a shade under 55% in the latest central bank monthly poll of analysts released on Wednesday.
“The prediction follows weeks of political uncertainty and a plunge in the value of the peso…”
“Fears over the world economy have sent shares around the world tumbling as the manufacturing slowdown deepened. Wall Street stocks suffered their steepest declines in almost six weeks after weak factory and employment data.
“Manufacturers around the globe are cutting back production, faced with falling orders, according to the latest batch of PMI surveys…”
Live feed for any economic news junkies wanting to follow the slowdown in real time: