The Waning Global Growth Cycle

Capital managers are beginning to get vocal about the current economic growth cycle coming to an end. And, a combination of signs in the yields on US treasury bonds and a market slowdown in China caused by the tariff wars add weight to their predictions. Scott Minerd, CIO of the Guggenheim, recommended that investors should sell what equities they can now. The yield between 2- and 10-year Treasury notes is flattening, meaning, as the values rise the yields are lower for both bonds. This is a market indicator since it has accurately predicted the last seven recessions. MarketWatch

Sunsuper Pty Ltd. Of Austrailia is shifting away from stocks and other listed securities to infrastructure as the infrastructure index, S&P Global Infrastructure Total Return Index has begun to outperform the MSCI ACWI Net Total Return USD Index. For example, Chief Investment office Ian Patrick, stated that the values of non-listed assets are not as much by market slowdown. He implies that real assets are safer long-term investments over the long-term protecting net asset values that have the backing of sovereign countries. In fact, they are investing in two airports in the U.K. and a new rail line to the airport in Stockholm, Sweden. Equity becomes more expensive as growth cools. He predicts, “The peak of the global economic cycle is probably between 12 months and 18 months away.” Yahoo!Finance

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