David Rosenberg: Here are ten reasons you should take risk off the table right now
It has been expressed that it is certainly time to make some important changes in the portfolio, from the Federal Reserve to bonds, tariffs, and all global uncertainty.
And it is that all the positive forces that boosted the stock markets earlier this year have fallen from the table. There has been no trade agreement with China, nor a soft Brexit, and the Fed’s pivot was smaller than it seemed. It is not surprising that the S&P 500 leaves its worst stretch of the year. With signs that more problems are brewing,
Compilation of 10 reasons
Therefore, a small compilation of at least 10 reasons has been made to remove the risk from the table.
1. Tariff Man
We know what the recent past has taught us, which is that the stock market corrects long after these threats and Trump’s tariff actions.
2. The Fed’s flip flop
The Fed has constantly hindered its communications with the market and has failed in a way it had not seen in more than 30 years as a market economist.
3. Rolling the dice has become policy
The administration in the United States is making some major miscalculations, and throwing the dice now seems to be the preferred option.
4. Beijing has more cards to play
China, in turn, is threatening reprisals of its own. This is where the negative economic impacts of the second round are strengthened.
… it’s not just a trade war, but probably a currency war that we should all keep in mind
5. The weakening yuan
One of these options, already underway, is to sanction a weaker yuan. This is the kind of “stimulus” or “antidote” that Beijing is willing to pursue, and remember what happened the last time this happened in late 2015 and early 2016.
6. Bad news bunds
The global bond market is begging the stock markets to make a profit.
7. A U.S. cooldown
The US economy is losing momentum significantly. The fall in construction spending in June, the fall in the manufacturing PMI of the ISM in July and the contraction in the workweek, factory hours and overtime are indicating a considerable cooling of that 2.6 percent of growth performance of the real GDP of the first half.
8. Global concerns
It is important to keep in mind that this is a global trade war.
9. Bullion’s big rally
The dollar is recovering and also the gold, at the same time, the latter to new six-year highs against the dollar.
10. An era of uncertainty
It is time to make history. Maybe before World War I, It would be a start when the world turned inward.
Source: David Rosenberg | National Post