All rights reserved.Oil and agriculture experienced a mini-recession in 2016 that might have influenced the presidential election Within weeks, global markets were sending a message: Not so fast.The dollar kept strengthening, the price of commodities kept falling, and the Standard & Poor's 500 dropped about 9 percent over three weeks in late January and early February. China had long pegged the value of its currency to the dollar, so a stronger dollar was also making Chinese companies less competitive globally. But here's a summary:In 2015, Chinese leaders were concerned that their economy was experiencing a credit bubble, and they began imposing policies to restrain growth. Forbes: Revisions Show U.S. Industrial Mini-Recession In 2015. In the United States, capital spending was growing again by the summer of 2016.Some analysts of financial markets have put a conspiratorial bent on the concerted action from the two sides of the Pacific, speculating that leaders had made a secret deal at the G-20 meeting in February 2016.
The US GDP looks like it can sustain 3+% GDP growth for some time. But the mini-recession warns of the risk of ricochet.Like it or not, the complexity of our global connections means that policy can't just focus on the home front.Editorial and commentary from op-ed columnists, the editorial board and contributing writers from Stand with us in our mission to discover and uncover the story of North TexasCopyright © 2020 The Dallas Morning News. Nikko AM makes no guarantee, representation or warranty, express or implied, and accepts no responsibility or liability for the accuracy or completeness of this document. The 2015–2016 stock market selloff was the period of decline in the value of stock prices globally that occurred between June 2015 to June 2016. But that turnaround began in mid-2016 by most measures, not late 2016 as suggested by the White House's "six quarter compound annual growth rate" measure.Second, the mini-recession may well have affected some political attitudes during the 2016 election.
Estimates of future performance are based on assumptions that may not be realised. Overall growth fell to 1.3 percent in the four quarters that ended in mid-2016, from 3.4 percent in the preceding year.The national economy kept adding jobs. Opinions stated in this document may change without notice.In any investment, past performance is neither an indication nor a guarantee of future performance and a loss of capital may occur. It is directed only at (a) investment professionals falling within article 19 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005, (as amended) (the Order) (b) certain high net worth entities within the meaning of article 49 of the Order and (c) persons to whom this document may otherwise lawfully be communicated (all such persons being referred to as relevant persons) and is only available to such persons and any investment activity to which it relates will only be engaged in with such persons.This material is for the use of researchers, financial advisers and wholesale investors (in accordance with Schedule 1, Clause 3 of the Financial Markets Conduct Act 2013 in New Zealand). When China attempted to reduce this burden by loosening the peg in August 2015, it faced capital outflows, making the economic situation worse.Moreover, across major emerging markets, many companies and banks had borrowed money in dollars, so a stronger dollar made their debt burdens more onerous.Put it all together, and when the Fed moved toward raising interest rates — as it eventually did in December 2015 — it was essentially making financial conditions tighter and therefore slowing growth across big swaths of the world.The slowdown across emerging markets, in turn, meant less demand for oil and many other commodities. There was a sharp slowdown in business investment, caused by an interrelated weakening in emerging markets, a drop in the price of oil and other commodities, and a run-up in the value of the dollar. That made it devilishly hard to diagnose, let alone to fix, even for the people whose job was to do just that.At the Treasury Department, which is responsible for the United States' currency policies, it seemed well into 2015 that the strengthening dollar was mostly benign.