2018 was an eventful year for the United States, as Trump entered the second year of his presidency. The markets had an up-and-down year, there were many foreign trade stories and of course some major transactions worth noting.

The trade war with China was one of the biggest story lines of 2018. On March 1, President Trump announced the 25 percent tariff on steel and 10 percent tariff on aluminum for these imported goods from China.

The global reaction was almost an instant retaliation with China responding by imposing tariffs on 128 products it imports from the United States on April 2, including aluminum, airplanes, cars and many other products.

Two major M&A transactions drew all of the attention at the end of quarter two and beginning of quarter three. Broadcom’s acquisition of CA Technologies for 18.9 billion and Microsoft’s acquisition of GitHub for 7.5 billion were two of the biggest ones to highlight.

The U.S. economy expanded at a 3.5 percent pace in the third quarter fueled by high consumer spending and increased government spending, marking the strongest back-to-back quarters of growth since 2014.

Consumer spending, which accounts for about 70 percent of the economy, unexpectedly accelerated to a 4 percent increase, which was the highest since 2014.

The Dow Jones Industrial Average, S&P 500 and NASDAQ composite all hit record highs in 2018, as Amazon and Apple became the first companies to reach a $1 trillion dollar valuation triggering some of the market records.

Two major IPOs that took place were Spotify and AXA Equitable Holdings Inc, receiving $9.2 billion and $2.7 billion valuations, respectively

The Facebook scandal was one of the biggest stories that shook the markets in 2018. Facebook’s privacy breach in quarter three sent Facebook shares tumbling 80 percent, provoking a steep decline in the markets.

After more than a year of negotiations, October 1 marked the day that the United States, Canada and Mexico reached an agreement to update the North American Free Trade Agreement (NAFTA), the 1994 pact that governs more than $1.2 trillion worth of trade among the three countries.

The new deal, which was signed by the leaders of all three countries at the G-20 Summit, will be known as the United States-Mexico-Canada Agreement, or USMCA.

Other important matters to note from 2018 are the following: the U.S. unemployment rate reached a record low 3.7 percent in September, which was the lowest level recorded since December 1969. The FED raised its benchmark funds rate from 2.25 percent to 2.5 percent in quarter four, which marked the fourth increase in 2018 and the ninth since it began normalizing rates in December 2015. Home price appreciation rose steadily in 2018, but it began to slow down towards the back half of the year. The rate of home price increases fell from 6.8 percent to 5.5 percent in quarter three and four.

Slowed down growth is anticipated in 2019 as the ongoing uncertainty about trade and economic growth is starting to weigh in on markets. The direct effects of tariffs and rate hikes are important to consider.

There are plenty of warning signs from the financial markets, as bank share prices have been hammered, and credit spreads, specifically the lowest-rated corporate bonds, have widened dramatically.

The difference between yields on three-month U.S. Treasury bills and ten-year notes continue to shrink.

A negative spread implies the Fed will soon be lowering interest rates, since this is how the central bank typically fights recessions. The spread has been an almost-perfect indication of downturns for the upcoming year.