Don’t be too impressed by earnings “beats”
DWS | Quarterly earnings are down year-on-year and 2020 forecasts are being cut further. It’s hope that is driving markets for now.
US
US growth more resilient than feared
David Kohl (Julius Baer) | US growth appears to be more resilient than feared. Trade-related uncertainty and weaker global industrial activity dampened business investment, but private consumption remained strong and the return of residential investment as a positive growth contributor improves the 2020 growth outlook.
The Manchurian Candidate in the White House
Shaun Riordan | Is there a Manchurian candidate in the White House? While the US people decide who Trump is, Europe must decide whether it wants to be a player in the geopolitical chess game, or the chessboard on which others play.
Is the US losing the artificial intelligence arms race?
James Johnson (The Conversation) | The U.S. government, long a proponent of advancing technology for military purposes, sees artificial intelligence as key to the next generation of fighting tools.
Andrew Yang’s ‘freedom dividend’ echoes a 1930s basic income proposal that reshaped Social Security
Edwin Amenta (The Conversation) | Entrepreneur and political novice Andrew Yang is hoping a wild gambit will help him win the Democratic presidential nomination: give 10 American families US$1,000 a month.
“Political paralysis can be beneficial for the markets”
Pablo Pardo (Washington) | Ken Fisher is a curious multi-millionaire, who talks in plain language and loves the media. At 69, he is retired from the day-to-day management of his fund, Fisher Investments, which holds more than 100 billion dollars in management, and seems to be enjoying himself as a columnist in, among other media, the dailies Financial Times and USA Today and the weekly Forbes, where he sets out his ideas about markets in a plain language easily understood by everyone. And he does not hesitate to runs against the current when, for example, he says “I am not a fan of philanthropy”, although, it also has to be pointed out that he has donated millions to protect woods in the US, especially the redwoods, a species of sequoia which reach more than 100m high and are one of the largest trees in the world.
Japan and the EU sign infrastructure deal to rival China’s Belt and Road
(European Views) | The EU and Japan last week signed an infrastructure agreement aimed at linking Europe and Asia in a barely veiled bid to counter China’s controversial Belt and Road Initiative.
Risks are rising, but recession in the eurozone is not expected
Johannes Müller (DWS) | Three months ago, we warned that: “The outlook for the world economy is getting cloudier. Escalating trade tensions could trigger further downgrades.” Sadly, this has now come to pass. In several export-oriented economies, notably Germany and Japan, we had to cut our growth forecasts for both 2019 and 2020. For the U.S., we have left our 2020 forecast unchanged at 2%, but now expect just 2.3% for 2019, 0.2% less than three months ago.
Even if a US recession is avoided, the S&P 500 could fall by as much as 10-15%
Experts at UBP believe that fiscal stimulus or, more effectively, fiscal- monetary coordination presents the most potent upside catalyst to risk-assets.
Fears of a slowdown more pronounced
Investment Desk, Bank Degroof Petercam │ Fears of a slowdown are more pronounced. We are seeing a slight reduction in trade tensions since President Trump announced a partial delay in the imposition of new tariffs on Chinese products. The tariffs on approximately half of the 300,000 goods subject to the measures will be introduced from 15 December instead of September.