Global growth now hamstrung by a moderate but unmistakable slowdown in economic momentum in Europe and elsewhere.
“I think that inflation and interest rates will catch up to the market as we normalize”
- “I would be a reducer on strength, not a buyer on strength. I think the market is adequately valued,” Cooperman tells CNBC.
- Cooperman also says 2019 could be a turbulent year for equities because the Fed is tightening monetary conditions and inflation is looking stronger.
Asian companies face increased risk of default as politicians in the region accept more corporate failures, adding to strains as refinancing costs climb.
China is allowing more defaults to happen as it promotes more market-driven pricing in bond markets, while India’s overhaul of its bankruptcy courts is forcing large delinquent borrowers into the courts. JPMorgan Chase & Co. has revised its default-rate forecast for Asian high-yield bonds to 2.8 percent, citing negative surprises such as China Energy Reserve & Chemicals Group Co.’s recent debt failure. The U.S. bank forecasts the amount of defaults on such debt this year may rise to the highest since the global financial crisis.
Warns The World’s Biggest Hedge Fund
- Bridgewater Associates is bearish on nearly every financial asset, it said in a recent note to clients.
- “2019 is setting up to be a dangerous period for the economy,” the giant hedge fund said.
- Analysts from JP Morgan have also noted the risks of a systemic market correction in 2019 are building.
- Bridgewater said earlier this month that a major driver of the stock market is nearing its end.
Other factors have included dangerous currency over-valuations, & the Eurozone crisis which has weighed on many linked EM nations.
- The emerging market crisis and contagion in Argentina and Turkey could be channeled to other countries, an IIF report said.
- There is now concerns over a “high” concentration of risk in Lebanon, Columbia and South Africa which could spread further through the global economy.