Fears of a government shutdown have added to investors’ concerns over economic growth and a trade war. The S&P 500 is down around 10 per cent this month, the largest drop in the month of December since 1931. The benchmark’s drop of almost eight per cent this year is its biggest since the 2008 financial crisis. (Financial Times)

Talking point: The key question: does this presage a recession or, worse yet, a ‘30s-style Depression? Economists are split. Brett House, Scotiabank’s deputy chief economist, doesn’t think there will be a recession in 2019 or 2020, in part because President Donald Trump will want to avoid anything that passes costs on to consumers in advance of the upcoming presidential election. Economists at Morgan Stanley, however, put the risk of a U.S. recession in 2019 at 15 per cent, and bump that up to 20 per cent by 2020, due to accelerating growth and inflation. In the immediate term: nothing short of a holiday miracle is needed to avoid this month being the worst December for U.S. markets since, yes, the Great Depression. Happy holidays!