First, the good news – although not good. In a new forecast, Oxford Economics expects the world economy to stabilize during the first half of next year.
“We believe the economy will be close to the new structural growth rate. Poor demographics, the cumulative effect of years of weak public and private investment and the ongoing weakness in productivity mean that we have to get used to slowing growth, ”writes the Oxford Economics team. If a recession occurs, it will probably be a mild style in 2001 rather than a carnage from 2008.
Now for the bad news: financial markets are overrated, according to Oxford Economics. "Double printing of weak price power and low productivity means a bleak outlook for margins ̵
Innes McFee, Managing Director of Macro and Investor Services at Oxford Economics, said US equities are overvalued by around 35%. So if there is a recession, a correction could hit stocks by that amount or even more.
He also pointed out that in the seven times when global GDP has declined by 1% since the 1980s, G-7 central banks have cut interest rates by an average of 300 basis points. They clearly won't be able to do that this time around, since the average interest rate right now is 75 basis points. "There's not much room to maneuver," he said. And the key policy rates may be less effective than before in stimulating the economy.
The summing
Optimism was in the air after White House economic adviser Larry Kudlow told the Council on Foreign Relations that "mood music is good" for reaching a potential American and China trade agreement.
There are quite a few US economic reports on the horizon, especially the October and November issue of a New York-area production study.
Amazon
AMZN, + 0.08%
plans to protest the award of a 10-year, $ 10 billion Pentagon cloud computing contract to Microsoft
MSFT, + 0.51%
that many people assumed would go to that online store giant.
Nvidia
NVDA, + 0.58%
predicted a return to revenue growth after four quarters of decline as the chip maker projected its quarterly results.
The world's largest Starbucks
SBUX, + 0.52%
store opens in Chicago. RH
RH, + 1.29%
shot up in premarket trade after a filling showed that Warren Buffett's Berkshire Hathaway is building a stake in the furniture retailer.
BT
BT.A, -1.53%
shares fell in London following a proposal by the opposition Labor Party to partially nationalize it.
The markets
After another day of almost no movement for the Dow Jones Industrial Average
DJIA, -0.01%
Thursday, US Stock Futures
ES00, + 0.25%
YM00, + 0.30%
were higher on Friday.
Coupon
TMUBMUSD10Y, + 0.81%
angled higher, and gold futures
GC00, -0.52%
falls.
Chart
According to Société Générale & # 39; s hedge fund position tracking, commodity futures trading commission data records record short games against VIX
VIX, -0.92% ,
volatility measure. "Such a bold move can be understood as a clear statement of risk," said the French bank. Net long positions in emerging market equities jumped to almost record highs pending a positive result of the trade war.
Random reader
Cleveland Browns defensive end Myles Garrett tore off Pittsburgh Steelers quarterback Mason Rudolph's helmet and hit him with it at the end of Brown's & # 39; 21-7 victory.
A government audit has revealed that NASA went out of its way to pay too much for Boeing
BA, + 1.36%
for its commercial Crew Program astronaut launch services.
Thrown – A black hole cast a star out of the Milky Way galaxy.
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