Apparently, fears of a recession are off the table.
As we noted just yesterday — “Some of the obstacles to growth, including the Fed and trade uncertainties, are being removed, and that will have a powerful positive impact on the economy,” said Larry Kudow, as quoted by The Washington Post.
Now, according to a Bank of America fund manager survey, global growth expectations are up 22 percentage points over two months to a net 29% of those surveyed saying the world economy will accelerate next year, as noted by MarketWatch. Even better, expectations are for the S&P 500 to 3,322, according to the survey.
That’s up 10% year over year, and is the highest number from the survey since June 2018.
All thanks again to negotiations between the U.S. and China, and the removal of tariffs from both sides, which could have walloped the global economy.
The survey also finds that 68% say a recession is unlikely in the New Year, as noted by CNBC. The survey “confirms the bulls are back and are buying equities,” wrote Michael Hartnett, BofA Global Research’s chief investment strategist.
Those surveyed also say they’re ditching bonds for stocks and commodities, too.
“We may have reached the point of ‘peak tariffs’ and this deal could be the start of a series of phased rollbacks,” said Mark Haefele, chief investment officer at UBS Global Wealth Management said, as quoted by MarketWatch. “This could unlock further upside for equity markets, driven by an improvement in business confidence and a recovery in investment.”
There is Just One Tiny Uncertainty
While there’s plenty to cheer, there’s just one tiny uncertainty.
There’s no trade deal on the table. It hasn’t been written, or signed. Until that happens, the trade war is on. Plus, there may be disagreements over Chinese purchases on agricultural products.
Granted, Trump said China would buy $50 billion worth of agricultural products “very soon.” However, China has been reluctant to mention any of this so far.
“That scale of purchases seems implausible and Chinese officials were reluctant to mention any specific target during their press conference,” Nomura analysts, including chief China economist Ting Lu, said, as quoted by CNBC.