Consumers may be the biggest risk to the stock market

Business growth is slowing, and the US government's economic stimulus is waning. That means America is pinni...

Posted: Jan 9, 2019 12:32 AM
Updated: Jan 9, 2019 12:32 AM

Business growth is slowing, and the US government's economic stimulus is waning. That means America is pinning its hopes on consumers to keep the economy growing.

If people become more cautious about their spending, that could weigh heavily on the economy and stock market, says Mark Howard, senior multi-asset specialist at BNP Paribas. He said he remains concerned about possible shocks to consumer confidence and behavior this year, calling consumer spending the biggest risk to markets.

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Howard will appear on CNN Business' Markets Now live show, hosted by CNN Business editor-at-large Richard Quest, on Wednesday at 12:45 pm ET.

Consumer spending makes up two-thirds of US gross domestic product. But consumers' confidence has fallen for two straight months, according to the Conference Board, although it remains at an historically high level. Consumer confidence in October was at its highest since 2000.

There's no reason to panic. But corporate earnings, which also fuel the economy, are starting to slow, too. Companies expect profit growth of about 7% this quarter, far lower than the growth of more than 20% in 2018. And the Institute for Supply Management's manufacturing and services sector reports this month showed business production is starting to slow — the manufacturing index fell by the largest amount since 2008.

The good news is the economy is not close to a recession. The stock market shuddered last month over the risk of a downturn, but the economy remains healthy. Stocks are posting a decent comeback this month.

The global economy will gradually slow as a whole, Howard believes. That's why the Fed is being more cautious about its monetary policy. Wary of raising interest rates too quickly, the Fed signaled two rate hikes in 2019 — half the number from 2018. The Fed is also gradually shrinking its balance sheet instead of dumping all economic stimulus at once.

Still, investors remain extremely fearful, according to CNN Business' Fear and Greed index. A bad consumer confidence reading or a spate of lousy earnings reports could rattle markets once again.

"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.

You can watch "Markets Now" at CNN.com/MarketsNow from your desk, phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 512632

Reported Deaths: 10262
CountyCasesDeaths
Harrison34853555
DeSoto33162432
Hinds32556641
Jackson24830389
Rankin22442402
Lee16238242
Madison14874283
Jones14086247
Forrest13741259
Lauderdale12249324
Lowndes11286193
Lamar10644140
Pearl River9707244
Lafayette8827143
Hancock7835132
Washington7550169
Oktibbeha7204138
Monroe6989179
Pontotoc6970109
Warren6849178
Panola6746134
Neshoba6726210
Marshall6653141
Bolivar6440151
Union633897
Pike5924156
Alcorn5862107
Lincoln5525136
George510180
Prentiss500884
Tippah490282
Itawamba4829107
Scott477499
Adams4766125
Tate4748116
Leflore4723144
Copiah455895
Yazoo455591
Simpson4543117
Wayne442772
Covington432895
Sunflower4299106
Marion4265112
Coahoma4227109
Leake413790
Newton395581
Tishomingo381793
Grenada3775109
Stone365666
Jasper340166
Attala337790
Winston317792
Chickasaw313367
Clay311878
Clarke301195
Calhoun284449
Holmes271289
Smith268952
Yalobusha243747
Tallahatchie231453
Greene224749
Walthall221366
Lawrence217840
Perry213356
Amite209557
Webster205148
Noxubee188642
Montgomery181557
Carroll174441
Jefferson Davis173643
Tunica163239
Benton152639
Kemper144941
Choctaw136527
Claiborne134238
Humphreys131139
Franklin124929
Quitman107528
Wilkinson105939
Jefferson96834
Sharkey65121
Issaquena1957
Unassigned00

Alabama Coronavirus Cases

Cases: 844594

Reported Deaths: 16115
CountyCasesDeaths
Jefferson1160612006
Mobile741651379
Madison53255732
Shelby38313368
Baldwin38061589
Tuscaloosa35996641
Montgomery34473781
Lee25541263
Calhoun22582518
Morgan22441406
Etowah20009517
Marshall18771316
Houston17723425
St. Clair16863358
Limestone16123218
Cullman16032303
Elmore15902294
Lauderdale14945306
Talladega14186299
DeKalb12957269
Walker12011380
Blount10700192
Autauga10512157
Jackson10151194
Coffee9412192
Colbert9325208
Dale9013191
Tallapoosa7248201
Russell707465
Chilton7015170
Escambia6951143
Covington6926195
Franklin6337108
Chambers5778142
Marion5400130
Dallas5283209
Pike5114109
Clarke484986
Lawrence4826129
Winston4777110
Geneva4640136
Bibb434094
Barbour369180
Butler3433100
Marengo342393
Monroe336666
Randolph334067
Pickens333188
Fayette329885
Henry320566
Hale317989
Cherokee316963
Crenshaw260477
Washington256952
Cleburne254360
Lamar251253
Clay250869
Macon244764
Conecuh192762
Coosa184647
Lowndes178168
Wilcox177438
Bullock152545
Perry141840
Sumter139041
Greene130245
Choctaw93228
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