The US markets have had a tumultuous week, with real estate weakening, Vladimir Putin suspending a nuclear treaty, and Morgan Stanley warning of a stock market “death zone”.
Real Estate Weakness
The US real estate market has been a major factor in the markets’ tumbling this week. According to the National Association of Realtors, existing home sales dropped by 3.7% in February, the biggest drop in a year. This is due to a lack of available homes on the market, which is driving up prices and making it difficult for buyers to find affordable homes.
In addition, new home construction has also been weak, with housing starts dropping by 6.2% in February. This is likely due to rising mortgage rates, which have made it more expensive for buyers to purchase a home.
Putin Suspends Nuclear Treaty
Adding to the market volatility this week was the news that Russian President Vladimir Putin had suspended the Intermediate-Range Nuclear Forces Treaty. This treaty, which was signed in 1987, banned the US and Russia from having nuclear weapons with a range of 500 to 5,500 kilometers.
The suspension of this treaty has raised fears of a new arms race between the two countries, which could lead to increased military spending and a destabilization of the global economy.
Morgan Stanley Warns of Stock Market “Death Zone”
Finally, Morgan Stanley warned this week of a potential “death zone” in the stock market. The investment bank warned that the S&P 500 could fall as much as 15% if the US-China trade war continues to escalate.
The warning comes after a volatile week for the markets, with the S&P 500 dropping more than 4%. The index is now down more than 10% from its all-time high in late September.
The US markets have had a tumultuous week, with real estate weakening, Vladimir Putin suspending a nuclear treaty, and Morgan Stanley warning of a stock market “death zone”. This has caused volatility in the markets and has investors worried about the future of the economy. However, it is important to remember that these events are only temporary and that the markets will eventually recover.