Markets are in trouble.

At the moment, the Dow Jones is well under its 50-day moving average, and could fall further unless there’s substantial news to push it higher.

Adding to the pressure, the House Oversight Committee is now expected to issue a subpoena to the White House regarding Ukraine documents.  President Trump is expected to impose tariffs on EU goods, including aircrafts and farm products.

And the ISM September 2019 survey is pointing to contraction.

In fact, the ISM September survey on manufacturing registered came in at 47.8%, down from 49.1% from July.  It’s also the worst on record since June 2019, and shows contraction at less than 50.

“The disappointing data is only fanning long-standing fears of slowing global growth,” Alec Young, managing director of global markets research at FTSE Russell said, as quoted by MarketWatch.  “And with U.S.-China trade expected to produce little in the way of near-term breakthroughs, investors continue to favor counter-cyclical, defensive stocks with high dividend yields as weak data pushes interest rates ever lower.”

It’s a clear sign the trade war has done a good amount of damage.

Private Payrolls Shows the Pace of Hiring is Slowing

The private sector did create more jobs than expected in September 2019, but the pace of hiring slowed.  Companies hired 135,000 workers in September, which was better than the 125,000 expected by analysts. However, that’s down from the 157,000 posted in August, and is also down from initial reports for an addition of 195,000 workers.

“We are in a very critical place, kind of a fragile juncture in the economy,” Mark Zandi, chief economist at Moody’s, said as quoted by CNBC, “What happens over the next few weeks, next few months, will determine whether there’s an economic downturn in 2020. Demand for labor is beginning to weaken. Hiring is weakening across the board.” 

This is all part of the reason we’ve been pounding the table over volatility-based trades, including the TVIX, VXX, and UVXY.  Now is not time to panic.  Sit tight.