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Thread: Economic Outlook

  1. #1

    Default Economic Outlook

    The inversion of the bond yield and the trade war with China have investors believing the we are approaching a recession in the U.S. But economist claim the numbers for recession are not adding up. Consumer strength continues to keep the economy strong even while manufacturing slows. Consumers account for 2/3 of the U.S. economy. We also have the Federal Reserve pressured by markets to lower interest rates and further stimulate the economy.

    Chris Rupkey, MUFG’s chief financial economist, said the bond market is not reflecting reality but fear brought on by the U.S.-China trade wars.

    Fear and uncertainty have investors retreating stocks. This may be good for markets in the long-run if assets were beginning to outrun the economy.


    Growth forecasts are rising and economy looks nowhere near as bad as bond market predicts


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  3. #2

    Default Re: Economic Outlook

    The U.S. is at the center of three flagstatonary affairs that could knock the country into a recession by next year. This is according to Nouriel Roubini, CEO of Roubini Macro Associates and professor of economics at the NYC Stern School of business.

    These threats are the trade and currency war with China, the technology cold war with China, and conflict with Iran that could lead to spike in oil costs.

    Apart from pointing out these threats, he also claims:

    Such shocks cannot be reversed through monetary or fiscal policy making.

    The Fed can’t rescue us from the coming supply-shock recession

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  5. #3

    Default Re: Economic Outlook

    President Trump steps in again following a Fed performance to stir trouble in the trade war and further pressure the Fed to combat the possible economic effects..

    Trump’s trade threats increased the chances for a recession, but also a Fed rate cut

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  7. #4

    Default Re: Economic Outlook

    Surge in bond prices is justified by the economic conditions. Anyone who invests or pays attention at all to the world knows that expectations are growing for a recession in the near future. Naturally that has investors seeking the remaining decent yield on long-term bonds to counter an end to the bull market. But more plays into just getting a positive yield. Inflation has been low enough to keep bonds attractive; a jump in the rate of inflation would counter the yield of a bond's purchasing power.

    A legitimate spark back in the global economy would also give investors reason to ditch bonds for stocks that would produce better returns. Uncertainty in trade and government stability has kept investors weary keeping money in stocks for the long run.

    This leaves the fate of markets to governments and the central banks. The state of affairs between nations will help the investor decide where he see's his money best put to work. Monetary policy with attempts to give stimulus to the economy could lead to money moving to riskier equities and also driving up inflation to levels that would diminish appetite for bonds. The FOMC meeting in mid-September may give us a better idea of how aggressive the Fed thinks it needs to be.

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  9. #5

    Default Re: Economic Outlook

    Powell says the Fed is not forecasting or expecting a recession

    KEY POINTS

    “The Fed has through the course of the year seen fit to lower the expected path of interest rates,” Powell says.

    “That has supported the economy.”

    He says trade uncertainty is weighing on business investment and confidence.

    However, he expects the problems to be contained and not a major impediment to growth.

    https://www.cnbc.com/2019/09/06/powe...ood-place.html

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  11. #6

    Default Re: Economic Outlook

    Quote Originally Posted by tsptalk View Post
    Powell says the Fed is not forecasting or expecting a recession
    Their real opinion or what they're sticking to in order to keep consumer and employer sentiment up? And if they really think so, do they give credit to the latest monetary stimulus? How could they ever come out and say.. brace yourselves.. tie your money up and keep it safe just in case..? That would be talking yourself into a recession. I think Mr. Powell's words have the alternative motive; to keep spirits up and money moving in hopes unmentioned kinks will be corrected as a result.

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  13. #7

    Default Re: Economic Outlook

    Economist say the potential hit on consumer spending due to the spike in oil prices will be offset by its beneficial effect on industrial and manufacturing production.


    Talk of recession as a result of Saudi attack is overblown

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  15. #8

    Default Re: Economic Outlook

    Journalists Caroline Baum lays out her outlook on the economy. To her things may look optomistic lately but that is just part of a normal cycle. The direction of the economy is less promising. Geopolitical risks and the use of tariffs as a political tool is too much for Baum to assume the worst is over for the U.S. economy.

    The U.S. is not out of the woods yet

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  17. #9

    Default Re: Economic Outlook

    Fear and uncertainty in the economy has kept a lot of money on the sidelines of markets. This is what could be keeping market prices afloat in the historally volatile October..

    Why the stock market won’t stay down when everyone is ‘nervous’ and ‘defensive’


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  19. #10

    Default Re: Economic Outlook


    Tony Dwyer, analyst at Canaccord Genuity, said the nervousness is palpable.
    It's also chartable...


    https://stockcharts.com

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  21. #11

    Default Re: Economic Outlook

    The U.S. economic outlook is coming upon two hurdles this week. The greatest being the scheduled tariffs this coming Sunday where there is still lingering hope trade negotiators can further postpone the tariffs. The other is the FOMC meeting this week where rates are not expected to be changed but investors will be over analyzing the Federal Reserves policy statement to see how they comprehend the economy especially after the outstanding jobs report last week.

    Markets Watch's Greg Robb writes about three key subjects that market players should carefully look for in the policy statement.

    Three things market participants should watch for at the Fed interest-rate meeting
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    Disclaimer: This is not advice or a recommendation.

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