Economic concerns and trade war fears are weighing on the Dow.
At the moment, the Dow Jones is down nearly 250 points after the Chicago Business Barometer slid further into contraction territory to 43.2 in October from 47.1 in September. Anything under 50 is an unfortunate indication of contraction in regional manufacturing activity.
Economists had hoped the number would have inched to 48.5.
The report also noted demand weakened considerably in October as new orders fell to 37 – its lowest in 10 years. Order backlogs fell to 33.1. However, the report did note that October inventories rose to 47.1, its strongest showing since August, as noted by Morningstar.
This follows news that U.S. GDP grew faster than expected in the third quarter, but did slow slightly on a decline in business investments. For the quarter, GDP was up 1.9%. While that was down slightly from the 2% pace in the second quarter, it was still above forecasts.
In addition, private payrolls grew faster-than-expected in October 2019. However, growth was offset by a downward revision for September 2019. Companies hired 125,000 in October, according to ADP and Moody’s Analytics, as noted by CNBC.
At the same time, trade fears are weighing on the market, too.
Bloomberg reported that Chinese officials are doubtful over the possibility of a long-term trade deal with the U.S. Beijing is reluctant to give in on some of the key issues “due to President Trump’s unpredictability and the possibility that he would back out of any deal,” notes Fox.
However, there are still signs of some cooling.
“China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal, after APEC in Chile was canceled do to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing,” tweeted President Trump.