Is a Global Recession In the Cards?

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If you google the latest news headlines for the word “recession,” the results are enough to make you scream.

“Goldman Sachs says that every one of its private equity clients is preparing for a recession”… from Business Insider.

“Gundlach: A recession will come, so investors should start ‘playing defense right now’”… from Yahoo Finance.

And then there’s: “Gazing into the recession crystal ball.” (I need one of those.) That one’s from Reuters UK, and there is certainly a lot of chaos in Europe right now.

I’ve recommended some exciting international opportunities to my subscribers, but I agree with my colleague Louis Navellier that the United States is the oasis around the world.

Let’s take a look at why that is. Geopolitics is an important context for any smart investing strategy – and that’s especially true as we prepare for 2020…

There’s a lot to digest as we stand on the verge of the next decade. There’s been a major slowdown in China, and Japan, Italy, and now Germany fell into a recession. And, of course, there’s Brexit – the most chaotic mess of them all.

Here’s a quick recap: Back in late 2016, Britain voted to leave the European Union (EU). The vote shocked the world, especially the EU and even the people of Britain. In the nearly three years since, the EU and British Parliament have failed to come to a deal, and the initial Brexit date of March 29, 2019 passed. The date was pushed to April, then May, and the EU eventually settled on October 31… before pushing back again to January 31! We’re all left wondering: How long will Brexit uncertainty remain a thorn in everyone’s side?

Meanwhile, many of the economic reports in Europe have been grim:

In September, the European Union purchasing managers index (PMI) slipped to an 83-month low of 45.6, down from 47 in August. This was a big surprise. Economists were expecting 47.3. Even worse, Germany’s manufacturing PMI dropped to 41.4 in September, down from 43.5 in August. That was the lowest level in more than a decade.

Since any reading under 50 signals a contraction, there is no doubt that Europe faces a decline in economic growth. As you may know, Germany is the economic powerhouse there, but even its GDP contracted in the second quarter. And if the latest PMI data is any indication, Germany’s GDP declined in the third quarter. Two quarters of negative GDP growth in a row officially signals a recession.

Japan isn’t faring much better. In the third quarter of 2018, GDP fell 2%. (That makes America’s 2% growth quite a relief, by comparison.)

Things started looking up this year in the second quarter, when Japan posted 1.8% growth. But now, Japan’s gotten knocked down again to just 0.2% growth in the third quarter, far short of expectations for 0.8% growth.

Why? Well, like the rest of us, Japan relies on international trade networks. And those are experiencing disruption from the U.S.-China trade war.

We took a look at the trade war on Thursday, and economically it certainly seems to be impacting China as well. Prior to that, in 2017, China’s GDP was running at a nice growth rate of 6.9%. Now, in the third quarter, China posted 6% GDP growth. Believe it or not, that’s the least growth China has had since the early 1990s.

Here in the United States, our Federal Reserve is very sensitive to global events. Fed members have been particularly concerned about slowing economic growth in China and Europe, as well as here in this country. However, the U.S. is still one of the few countries with positive interest rates. As a result, a massive international capital flight has effectively suppressed U.S. Treasury yields.

But will that continue in 2020?

That, of course, is the question now. As you’ve seen in the past week, I’ve been researching these situations closely.

And on Tuesday, December 10, at the Early Warning Summit 2020, I’ll make my case for where I expect the market to go from here. For the first time ever, I’m going to share a stage with my colleague and investing legend Louis Navellier. We’ll reveal where we believe the market will go in 2020 and why.

Please click here to RSVP and join Louis and me for this ground-breaking event.

P.S. Something big could be in store for stocks in 2020. I fear a lot of investors will not be prepared.

That’s why this Tuesday is so critical. I’m holding an emergency briefing that day, December 10 at 7 p.m. ET, with my InvestorPlace colleague Louis Navellier.

Several headwinds are converging in the markets at once, and they will drastically impact the share price of virtually every stock. Prepare now and you could have the chance to make a fortune. But ignore this warning and it could cost you dearly.

This emergency briefing is free, and I strongly urge you to attend. All you have to do is click here to sign up now.

Matt McCall’s MoneyLine Podcast

Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt talks about the Russell 2000. The small-cap index rallied to a new 52-week high, trigging a great buy signal. And a small, unknown recent IPO joined the small caps in breaking out. Then, Matt takes a look back at the biggest winners of the last decade.

You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.

Learn where Matt McCall sees
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Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2019/12/is-a-global-recession-in-the-cards/.

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