JPMorgan Forecasts Dismal 1% GDP Growth, Signals Possible Rate Cut

[bobsm]

JPMorgan Forecasts Dismal 1% GDP Growth, Signals Possible Rate Cut
Nick Marinoff
24/05/2019

By CCN: The other shoe could be about to drop in the economy. JPMorgan economists in a report predict the second quarter will witness slowed economic growth. They’re expecting U.S. GDP to expand by a measly 1%, lower than their original predictions of 2.25%. During Q1, the economy expanded at a rate of 3.2%.

The economists also analyze the Federal Reserve, marking an equal chance for interest rate hikes as there is for cuts. Originally, JPMorgan economists believed a rate hike would be the next move. Trump has been pushing for an interest rate cut. He recently tweeted:

Donald J. Trump
✔
@realDonaldTrump
China is adding great stimulus to its economy while at the same time keeping interest rates low. Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening. We have the potential to go...

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1:56 AM - May 1, 2019
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Donald J. Trump
✔
@realDonaldTrump
....up like a rocket if we did some lowering of rates, like one point, and some quantitative easing. Yes, we are doing very well at 3.2% GDP, but with our wonderfully low inflation, we could be setting major records &, at the same time, make our National Debt start to look small!

Should the Fed decide to slash interests, it will be a sign of a weakening economy, according to Morgan Creek Capital Management CEO Mark Yusko in a recent CNBC interview.

3 BIGGEST RISKS PLAGUING THE U.S. ECONOMY AS PER JPMORGAN

So what was behind JPMorgan’s weak economic growth forecast? Their reasoning was three-pronged, including:

-Uncertainty stemming from the trade tensions between the U.S. and China
-“Business sentiment”
-“Global economic” slowdown

It seems the president’s China tariffs has got everybody down. Most retailers and industries – specifically apparel and footwear – export major items from China, with footwear companies receiving more than 70% of their supplies from the country. The tariffs are shutting the doors to many of these companies’ “old ways” and forcing them to think about American-made products – something that probably hasn’t been on their minds for a while.

Anecdotally, Chris Rupkey, an MUFG Union Bank chief financial economist, suggests to CNBC that CFOs believe the chances of a recession are increasing, which ultimately inspired them to cancel several orders in both March and April. In all, total orders among manufacturers decreased by 2.1% in April.

SELL IN MAY, GO AWAY

Meanwhile, the economic slowdown that JPMorgan explains is spilling over into the stock market. May is shaping up to be the worst month of the year so far for stocks. The S&P 500 is hovering at approximately 2,800, having revisited January 2018 levels. It is in jeopardy of slipping to the 2,700 level or worse, giving stock market bulls the opportunity to buy the dip if they choose to.

https://www.ccn.com/jpmorgan-gdp-possible-rate-cut

 

[TaiShang]

They’re expecting U.S. GDP to expand by a measly 1%, lower than their original predictions of 2.25%.

Now that they are winning so handsomely, even 1% is too much for them.

Economic fascism creates stories even for the poor to feel happy for the rich getting richer.

 

[atan651]

The downgrade is certainly a plunge! Cutting rates may not even help. trump's policies of failure after failure - must be great for America, right?!!

 

[TaiShang]

Former Missouri governor says US heartland badly hit by trade dispute with China

Source: Xinhua Published: 2019/5/25

America's heartland, the seat of the US agricultural economy, has been badly hit by the country's trade dispute with China, former Missouri Governor Bob Holden said, urging the two sides to reach a win-win agreement soon.

Eighteen out of the 20 US states located between the Great Lakes and the Gulf of Mexico are "the hardest hit" by tariffs stemming from the US-China trade dispute, Holden, chairman and CEO of the United States Heartland China Association, told Xinhua.

"There's a great deal of concern, uneasiness" from soybean producers in Missouri and some other agricultural areas, Holden said on the sidelines of the Fifth China-US Governors Forum held in the US state of Kentucky.

"The thing with farming, it is a cyclical process," Holden said. "If you leave the soybeans on the field until they rot, you get no benefit out of them."

Holden, whose organization is committed to building stronger ties between the 20 US states -- which include Tennessee, Missouri, Iowa, Nebraska, Illinois, Texas and Oklahoma -- and China, said "we've got a very sincere interest in getting this resolved ... so we can get back to work."

To reach a trade agreement, the former Missouri governor said the two sides are "going to have to feel like they both gave something and they both gained something from it."

"They've got to look at it from the standpoint that what can we do and what can they do to both serve our self-interest and not undermine the credibility of the other," he said.

The three-day forum, which kicked off Wednesday, features dialogues on business, culture, education and other issues.

Despite the trade dispute, Holden said "there is a tremendous amount of interest from the local level in figuring out how we bring these two cultures together to work on behalf of both."

Holden, who has traveled to China about 15 times, said what struck him most is the people he met in China, who are "wonderful people, family people, who want their children to have a better opportunity than they have, which is the very same value system that we have in the middle part, the heartland of the United States."

Holden helped bring the first Confucius Institute to the state of Missouri when he was a professor at Webster University.

He highlighted the importance of US-China cooperation on education and culture, saying that "it's my contention that how well you put together the cultural relationships, how well you build the education partnerships, will determine how successful you're going to be in the business department."

Noting that he got "uneasy feelings" about what he saw in the political world, Holden said if cultural and educational aspects of the two countries could be mobilized, "they will be the driving force in making changes."

"Education is at the center of what we do," Holden said, adding that his organization has been helping establish connections between academic institutions of the two countries.

"It's important that we continue to look at ways to connect our educational system, our students with the students from China so that they can, at a young age, get to understand both cultures," he said.

Holden opened Missouri's first trade office in China during his term from 2001 to 2005. The former Missouri governor has seen new opportunities for cooperation between America's heartland and China, such as energy and infrastructure.

"We're also working with mayors throughout the 20-state region and governors throughout the 20-state region on building those relationships," he said.

 

[GumNaam]

China China China...the only three solutions to america's problems. instead of trying to stop China's rise and failing to stop it, america can do its masses a huge favor by accepting China's rise and letting it lead.