In the early days of the second half of 2019, rising risks tilting towards a continuing slowdown in global growth abound: US-China trade war grinds on regardless; US indices of business confidence and elsewhere are falling fast; world trade flows have begun to slacken; global manufacturing activity is already shrinking and services have started to follow as domestic demand falters; long-term bond yields resumed tumbling; the current economic expansion’s remarkable longevity is showing signs it could succumb to old age.
Yet, equity investors are still buoyant – stock market is up by 19% so far this year. Jobs are up significantly in US by a whopping 224,000 new jobs in June 2019, more than twice as many as needed to keep up with workforce growth. It’s a puzzle.
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