August 2019

Slowing Growth vs. Easy Central Banks

• Global stocks edged slightly higher in July and bond yields were flat to lower as central banks turned increasingly dovish
• U.S. growth continues to outperform the rest of world due to a resilient consumer while global manufacturing continues to weaken particularly in the Eurozone
• China’s slowdown moderated slightly and additional improvement will hinge on greater stimulus
• Slowing global growth and disinflation are increasing expectations for further central bank easing. However, market reliance on a global easing cycle may be dashed if central bank actions fall short or if further easy monetary policy cannot provide the fuel to jump start global growth
• Trade uncertainty escalated as the U.S. announced it will impose an additional 10% tariff on $300 billion of Chinese goods starting September 1