Markets mixed, US faces “outsized risk”

Markets were mixed on Tuesday.

The S&P 500 fell 0.3 percent and the STOXX Europe 600 fell 0.5 percent.

However, Asian markets rose, with the Shanghai Composite up 1.5 percent and the Nikkei 225 up 0.9 percent.

Over the weekend, Goldman Sachs cut its US fourth-quarter annualised GDP growth rate to 5.5 percent, down from 6.5 percent, saying that “fading fiscal stimulus and a slower service sector recovery will both be headwinds in the medium term”.

On Tuesday, Morgan Stanley downgraded US equities to underweight, saying that “the next two months carry an outsized risk to growth, policy and the legislative agenda”.

There was more positive news though from Asia, where a report on Tuesday showed that China’s exports jumped 25.6 percent year-over-year in August, above expectations for a 17.1 percent rise.