Markets And Media Gird Themselves To Face A New Challenge

Summary

  • We had a great market in 2019 because we had no recession and there is no recession currently on the horizon.
  • Smooth sailing ahead?… Not so fast.
  • A new threat faces the market... the Chinese coronavirus outbreak and the potential economic disruption it may cause.
  • We’ve already had a taste of this disruption in the oil market.
  • A little perspective should help investors so keep calm and carry-on.


2019’s big concerns evaporate

Last week I attended an investment committee meeting for a small foundation for which, I serve as a board member. One of our members, a financial planner/ investment advisor, serves as a liaison to the street and his firm provides the committee with investment and economic commentary.

His report led with this answer to “why?” the market did so well last year, “No recession in 2019 and most likely not in 2020 either … and a trade war truce.” My question is since we have not had a “real” (in my opinion earnings’ recessions don’t count) recession in the past 10 years, why haven’t all years in the market been “bell ringers?” People (the media, talking heads, and pundits) have been calling for that “R” day of reckoning consistently over the same time period. On top of this, pre-Trumpian economics, we did not have trade wars. This, too, should have served to power the markets higher in those sometime, not-so-great market years we saw in the past decade.

Another thing about the so-called trade war with China and at some times the rest of the world I have to ask is just what was the impact on the U.S. or China? In China (poor China) the 2019 GDP still grew 6.1%. The US is forecasted by The Conference Board to only produce a paltry 2.3% number for 2019 vs 2.9% in 2018. Remember, too, China went on a voluntary path to curb its growth over 10 years ago. Prior to that they were chugging along at 12%+.

No Recession, No trade war … what could to wrong?

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Beating Buffett 4 weeks ago Member's comment

According to this article by Michael Snyder, China may be purposefully miscategorizing and under reporting the deaths. That experts at Lancaster University put the death toll at 11,000! What's your take on that?

talkmarkets.com/.../the-truth-about-the-coronavirus-outbreak

Bill Kort 4 weeks ago Author's comment

BB, Here is an article that I got off CNBC regarding comments of a former FDA official. His comment is that may be thousands of less severe un reported cases that have cleared by themselves.

www.cnbc.com/.../...imating-coronavirus-cases.html

Bill Kort 4 weeks ago Author's comment

BB, they could be. I have no way of verifying. The global spread of only 70 confirmed cases in 17 places outside of China would seem to belie this.