Dow Hits 14-Month Low As Markets Drop For The Second Day

The Dow Jones Industrial Average dipped below 23,000 points, hitting a 14-month low as the stock markets continued their downward spiral. The Dow lost nearly 470 points, closing the day at 22,859. The Nasdaq was down 108 points and dipped into bear market territory after losing over 20 percent of its value following a record high on August 29th. The S&P 500 finished the day at 2,467 points, a drop of 1.58 percent.

The stock market is on pace for its worst December since the Great Depression, and some investors are forecasting an economic slowdown in 2019, which could result in a recession. 

“While we aren’t explicitly forecasting a recession next year, we wouldn’t rule out a mild one,” John Higgins, chief markets economist of Capital Economics told the Associated Press. “At the least, we expect a significant economic slowdown.”

The markets were still reeling after the Federal Reserve announced their decision to raise the interest rate and their plans to continue shrinking their balance sheet on Wednesday (December 19). Investors are concerned that moves are coming at a time when the economy is starting to slow down. 

"There are only three things that matter: earnings, interest rates, and the dollar," Maris Ogg, president of Tower Bridge Advisors, told CNBC. "I think the more concerning thing is that we're starting to see in earnings announcements that it seems as if the momentum is slowing in more industries than even a month ago."

The fear of a government shutdown also spooked the markets ahead of the Friday deadline to keep the government running. 

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