Market Update – November 2019
The outlook for global growth has unfortunately not improved over the last month. The prolonged period of uncertainty over trade has clearly had a significant dampening effect on global growth. Whilst this has been felt most severely in the manufacturing sector, the duration of the uncertainty appears to be impacting on the much larger service sector. This is concerning as one area of strength in the global economy this year has been the consumption. The US consumer has been remarkably resilient, contributing more than 100% to the last two quarters of US GDP growth (other components being a drag on growth). Steady employment gains and moderate wage growth have clearly lent support, but the prolonged weakness in global manufacturing now appears to be spilling over into the service sector of the economy and labour markets. Weakness in business investment, corporate profits and elevated corporate debt loads is also a concern.