Le Fonti.tv October 2nd 2019
October 2, 2019Wall street at lowest since August
October 4, 2019UK is likely to leave the EU without a deal and that is another nail in the coffin of global economy.
After manufacturing, if non-manufacturing services also slips into contraction, it would be even more of a concern because that would mean the US would have two sectors in recession, says Peter Cardillo, Chief Market Economist, Spartan Capital. Excerpts from an interview with ETNOW.
What is happening with the United States? Is growth scare back again or was it never gone?
Some of the macro news that we have been getting lately points to a real slowdown that may turn into a recession. When I say may turn into a recession that is because of the fact that if we do not get some sort of a breakthrough in the trade talks, we could be facing a recession. That may come about in the second half of 2020. The latest batch of numbers that basically took the wind out of the market were the ISM PMI purchasing manufacturing index, which basically fell off the cliff and just confirmed that the manufacturing sector is slipping deeper into recession.
Then yesterday, we had the ADP employment numbers. The number in itself was not all that bad, but certainly not within the trend line of private growth accelerating and that is a sign that the labour market has slipped and we could see weaker hiring going forward. That is also a result of corporate America’s hesitation due to the trade war. Today we would be looking at the ISM non-manufacturing services and if that also slips into contraction, it would be even more of a concern because that woul ..
Then yesterday, we had the ADP employment numbers. The number in itself was not all that bad, but certainly not within the trend line of private growth accelerating and that is a sign that the labour market has slipped and we could see weaker hiring going forward. That is also a result of corporate America’s hesitation due to the trade war. Today we would be looking at the ISM non-manufacturing services and if that also slips into contraction, it would be even more of a concern because that woul that would mean US would have two sectors in recession.
But are markets ready for a recession? If growth slows down, could the markets fall further?
In that case, the slowdown is going to continue and the only thing that is going to save us now is some sort of a breakthrough in the upcoming trade talks. The US is going to slap $7.5 billions of tariffs on European goods including aircraft and agricultural products. That is another negative because somewhere down the line, there might be some retaliation. If the trade war expands to include other countries, that means corporate America and consumers are likely to be hesitant in hiring and consuming.
UK Prime Minister Boris Johnson has offered a last minute compromise deal with the European Union with regards to Brexit. Do you see the UK leaving the European Union with a deal or without one?
They are going to leave without one and that is another nail in the coffin for the global economy. I see some turbulent times ahead based on the fact that the global economy is slowing and Britain’s exit is probably going to be a chaotic one.
