U.S. stock futures were pessimistic at the start of Tuesday. The Dow Industrial Average futures were down 0.7%, while the S&P 500 dropped 0.7% and the Nasdaq, 0.9%, even though stocks finished up on Friday and U.S. markets were closed on Monday in observance of Martin Luther King Jr. day.
There’s plenty of news that might cause the reaction. New official data from China showed economic growth slowing, according to Reuters. Services grew by 7.4% in the fourth quarter of 2018, versus 7.9% the quarter before. Agriculture growth slowed from 3.6% in the third quarter to 3.5% from November through December 2018.
And China has company. The U.S. and Europe are expected to see slower growth as well this year, according to the Wall Street Journal. Trade wars and Brexit are concerns and the International Monetary Fund has lowered its 2019 global GDP growth forecast from 3.5% to 3.9%.
Corporate executives are also concerned. A new survey of CEOs by consultancy PwC shows that 30% expect global economic growth to decline over 2019 in what the firm called a “record jump in pessimism” over 2018. Nearly 30% expect conditions to worsen, although 42% still look for improvement. Between 2017 and 2018, there had been a big increase in optimism, from 29% to 57%.
Earlier in January, the Duke CFO Global Business Outlook poll found that a large majority of CFOs expect a recession in 2019.
Stocks elsewhere were also down, reported the Wall Street Journal. The Stoxx Europe 600 was down 0.4% early Tuesday, with China’s Shanghai Composite down 1.2%, the Nikkei in Japan having lost 0.5%, and Hong Kong’s Hang Seng Index off by 0.7%.