Global Recession Bell Rings Louder
Pay attention - many do believe that global recession is just around the corner. The indices are showing signs of stress. If you run a business, now is the time to look at your cash reserves: a liquid-flavoured investment in a highly reliable asset-class, in a trusted institution, will be a good play. Because during recession, credits disappear, the plans of today will ensure you can use the cash to take advantages of the paralyses.
Yes, in anything you do, do not take out the possibility that Nigeria could experience recession next year. Simply, there is a possibility that U.S.-China trade war can drag the global economy to recession. So, have that in mind and plan on mitigation strategies.
New signs emerged that the trade war is dragging down the global economy. The International Energy Agency this morning cut its projection for energy demand this year by 100,000 barrels to 1.2 million barrels per day, citing the “worsening trade outlook” as a “common theme across all regions.” China reported the slowest growth in factory output since 2002. And more than 500 U.S. companies—including retail giants Walmart, Target and Costco—said tariffs are hurting American businesses and consumers. A survey of CFOs found nearly half expected a recession by the middle of next year.
Also, CNBC has an additional alarm on the fall of Morgan Stanley Business Conditions Index which dropped 32 points in June.
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Morgan Stanley's Business Conditions Index fell this month by 32 points, the biggest one-month decline since the financial crisis. Economist Ellen Zentner said in a note that the "sharp deterioration in sentiment this month…was broad-based across sectors" and, interestingly, not all due to trade policy. There's that weak jobs report from last Friday, too. Anyhow, the drop is concerning because the index is designed to capture economic turning points.
And the semiconductor industry is also not seeing good numbers.
European semiconductor stocks are down due to a slowdown in demand, which the U.S. chip manufacturer Broadcom has warned about, citing Huawei and the U.S.-China trade conflict. A trader told Reuters: "It's not just Huawei, it's deeper than that. Visibility is shot. OEMs [carmakers] aren't ordering. Inventory concerns, which were supposed to ease, have not gone away. Goodbye H2 recovery hopes!" (Fortune newsletter)