Doha: Investment Advisor Ramzi Qasmieh said that global markets have not yet been able to overcome the shock of what is referred to as ‘Black Monday’ although some markets have recovered their losses recorded the previous day, thus, allowing them to surpass the decline, however, the overall situation remains challenging.
Speaking to Qatar News Agency (QNA), the Investment Advisor attributed the lack of full recovery to the high levels of fear among investors, particularly given ongoing concerns about potential economic recession risks amid a high-interest-rate environment, the uncertainty surrounding the United States election, and the high likelihood of an economic confrontation between the US, China, and Europe through the imposition of protective tariffs.
Qasmieh noted that on Monday, global markets experienced sharp declines, the most severe in nearly 38 years in some markets.
For instance, Japan’s Nikkei 225 stock index dropped by nearly 13 percent in a single session due to weak US economic data, especially concerning unemployment and claims for aid, which came in worse than expected.
This increased the likelihood of an economic recession affecting most of the world’s economies, leading to declines in commodity markets, as prices for essential commodities like oil and gold dropped, which are considered a safe haven for investors during crises, as well as a decline in cryptocurrencies.
The Investment Advisor highlighted that the Federal Reserve’s delay in taking steps to lower interest rates has heightened recession fears more than before, especially that forecasts had indicated a potential 50 basis point cut by the Fed before the end of the year, yet, Federal Reserve Chairman Jerome Powell’s recent statements about delaying rate cuts sent negative signals to the markets, indicating that the Fed is not in a hurry to reduce rates, which in turn intensified investor concerns about a slowdown due to prolonged high interest rates.
