The US should avoid economic recession in the coming year, but the odds of an earnings recession—where US corporate profit growth turns negative while overall economic growth does not—are rising.
The good news from the first half of 2019 is that the S&P 500 stock index is up 18.5%. The bad news is that it’s trading almost exactly where it was in mid-September of last year. In between, we’ve been on a roller coaster ride driven in large part by President Trump and his chaotic approach to trade negotiations.
One day he’s slapping tariffs on Mexican imports, the next day he’s not. If it’s Tuesday, it must be tariffs on China, and Wednesday, maybe Canada. Who knows?
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