What to expect in the current bear market
So far, all indicators point to this current bear market being of the milder type
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WE are in the midst of a global economic slowdown, with the US being the only bright spot globally. Global leading indicators have turned negative; the one-off boost in year-on-year comparisons from the US tax cuts will be absent next year; and the escalating US-China trade war creates significant headwinds for the global economy.
The market consensus is for a de-escalation of the trade war back-and-forth at the G20 meeting at the end of this month. However, for investors, there is downside risk if this consensus view is wrong, if viewed from the angle that this is not just about trade, but about much broader malfeasance by China that has gone unchecked for many years, at least in the eyes of the USA.
The US Vice President gave a wide-ranging speech last month at the Hudson Institute, which clearly outlines the United States' stance on China. The video can be seen on YouTube, and is a must-see for any investor who believes that current US-China conflict can be easily resolved, and that the US will cool-off their stance after the recent mid-term elections.
