Conflicting economic signals have analysts wondering if we are headed for a recession. Liz Ann Sonders of Schwab discusses the causes of the current market volatility. Despite investor concerns about the economy, the labor market remains robust with wage growth picking up significantly in January. Lucia Mutikani of Reuters reveals why the labor market stats don’t support forecasts of a weakening economy. If the prices of developed market stocks seem low to you, it could be due to NIRP, or negative interest rate policy. Nearly one-third  of these stocks are from countries that practice it. Jeffrey Kleintop, the Chief Global Investment Strategist at Schwab, explains why this policy poses a threat to the global economy.

What’s Behind The Recent Market Volatility?-  Global markets have been unusually volatile so far this year, including during the past few trading sessions.  There are many conflicting economic signals which Liz Ann Sonders, Chief Investment Officer at Schwab, discusses in this article.  Her bottom line assessment is that “recession risk is elevated, just not glaring yet.” Read more…

More Americans Quitting Jobs As Labor Market Strengthens–  U.S. job openings surged in December and the number of Americans voluntarily quitting work hit a nine-year high, pointing to labor market strength despite a slowdown in economic growth.  “If the labor market is tightening, can the economy really be faltering?” asks Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.  Read more…

How Negative Interest Rate Policy Is Affecting Investors–  Nearly one-third of developed market stocks are from countries where central banks have adopted a negative interest rate policy (NIRP).  A main concern over NIRP is that in order to cover the cost of holding excess reserves at the central bank, banks might have to push up lending rates, which in turn could slow borrowing and the economy. While this economic risk  has yet to be realized, increasingly negative interest rates may weigh more heavily on the stock market and pose a threat to the drivers of the global economy. Read more…

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