Growth stalls. Expectations have risen that growth will pick up in the coming months. If growth disappoints or if we see another soft patch we could see recession fears reappear. Deterioration in the labour market is also a risk.
Trade. The trade truce between the US & China could prove fragile, or President Trump could open a new front with Europe or others. Negotiations between the UK and the EU could go poorly with a tight deadline.
US elections. The upcoming US elections will determine the country’s direction for the coming years, and depending on the Democrat candidate, is likely to stoke market worries.
Liquidity in credit. Liquidity in credit markets has shrunk sharply since the financial crisis, while debt levels have continued to rise in recent years. A credit accident could lead to systemic fears.
Inflation surprise. Inflation is expected to be a bit higher, but a significant surprise could bring the Fed’s accommodative stance into question and cause market jitters.
European politics. Mrs. Merkel’s transition plans in Germany, a fragile coalition in Italy, ongoing protests in France and negotiations with the UK could all grab headlines.
Oil spike. A spike in oil prices could spark growth fears and impact market sentiment.
Tech sell-off. Technology has been one of the leading market sectors, so a loss of leadership or concerns about practices could impact broader markets.
Social unrest. Social unrest has been spreading across many developed countries and could impact market sentiment.
Middle East tensions. Tensions in the Middle East have been simmering for some time. A sharp escalation and military intervention fears would impact risk appetite.