Opening Statement from the September 2019 CCPM Forecaster

Opening Statement from the September 2019 CCPM Forecaster 

Originally published on September 1, 2019

For the first time in several years we are now witnessing the convergence of numerous macro risk factors which have weighed on investor sentiment. While sentiment continues to be led primarily by trade disputes, Treasury yields and interest rates, geopolitical variables remain a significant concern.

A rough assessment of the global macroeconomic landscape is indeed sobering. The European economy continues to weaken as a result of the Washington-Beijing trade dispute, but also due to social and political unrest. As a result, the ECB continues to extend the date of its first interest rate hike in more than a decade further into the future. In fact, in addition to an upcoming rate cut, we expect other economic stimulus to be announced.  

In 2018 we mentioned that Germany would be significantly impacted by a prolonged trade dispute between Washington and China, given its high dependence on trade with China (Intelligent Investor). This is in fact what has happened. Over the past year, Germany has reported two quarters of declining GDP growth. And it may well already be in a recession by the time GDP data has been revised. France is not doing much better. And of course Italy remains in deep trouble.

The UK economy reported its first decline in GDP growth (q-o-q) in ten years while the pound continues to get hammered...