After seeing a piece on expectations about economic growth for the next 12 to 18 months, we thought we would put down some of our ideas on the platform. The piece in CNBC attributed to Eustance Huang focused on recession comments from JP Morgan that said specifically that the likelihood of a global recession in the next year was between 33% and 40%, which is, in our view, rather high. JP Morgan Asset Management expects “slow and somewhat uninspiring” growth over the next 12 to 18 months, according to Tai Hui, the Asset Managers chief Asia market strategist. This all boils down to a lot of anxiety between CEOs and their will to invest in their companies and other countries.
With corporate investment slowing down, and no end in sight for the US-China trade war, which is now spreading to a US-EU trade war, global growth figures are being recalculated and rethought by the top banks around the world. Our Views: We thing that the likelihood of a global recession is higher than this article states. When you see the lack of investment and the slowing of trade between China and many other countries, it is clear that the US drive to shut down China exports is not only hurting major economies but many of the emerging economies.
The US and Japan now have trading ties that are stronger than any point in history, and this now seems to be clear for South Korea, Canada and Mexico. More importantly the US ties with India are improving as well as PM Modi visited the US and sat in on a series of meetings with the Trump White House – opening trade and other relationships. However, these are specific treaties and trade ties that isolate the US and her closest friends. We think that the in the next 12 months, and this is after reviewing historical patterns on the US inverted yield curve, trade flows, FedEX and UPS numbers and other data points, that there will be a 70% chance of recession in the US, China and the world in the next 12 months, possibly sooner.