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Macro Outlook & Future of U.S.-China RelationMichael McDonoughChief Economist, Financial Products
Email: [email protected]: 212-617-6815
@M_McDonough
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U.S. Recession, Boon or Stagnation?
The Future of U.S.-China Relations
China’s Future
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DEFINING THE TRUMP RALLY (ATTACK OF THE WASHING MACHINES)
U.S.
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TRUMP ADMINISTRATION SUCCESS (& CURRENT RISK)
U.S.
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ANIMAL SPIRITS COULD BE SLAYED BY RETURN OF UNCERTAINTY
U.S.
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SENTIMENT NOT AS SUPPORTIVE FOR GROWTH
U.S.
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IS THE U.S. AT RISK FOR RECESSION?
U.S.
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YIELD CURVE POTENTIALLY A WARNING SIGN
U.S.
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BUT, RECESSION STILL NOT A BIG RISK IN NEAR-TERM
U.S.
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ECONOMY NOT AT IMMINENT RISK OF RECESSION
U.S.
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GROWTH HAS LEGS BUT WILL SLOW
U.S.
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PROOF IS IN THE EARNINGS CALLS
U.S.
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TALK OF “AI” NOT ISOLATED TO TECH COMPANIES
U.S.
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FROM HIKE TO CUT (MARKET EXPECTATIONS)
U.S.
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FUTURE OF U.S. CHINA RELATIONS
• U.S.-China relations will not normalize
• Worsening economic conditions making both sides more willing to compromise
• Trade deficits are not at the center of the debate, it is intellectual property rights and more direct access to China’s economy
• Major choke point remains the enforcement mechanisms (arbitration, retaliatory tariffs, etc…)
• Outcome of President Trump’s Hanoi summit with North Korea making negotiations more complex
• A deal is much more likely than no deal and a Mar a Lago summit date would likely signify that a deal has been reached
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CHINA’S SLOWDOWN WAS NOT TRADE-WAR DRIVEN
China
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BUT, AN ESCALATION WOULDN’T COME WITHOUT COSTS
China
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CHINA’S ECONOMY REACHING A TURNING POINT
China
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DELEVERAGING PROCESS A “SUCCESS” FOR NOW…
China
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IN REALITY, THEY ARE KICKING THE CAN
China
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SLOWING PROPERTY SECTOR WILL WEIGH ON GROWTH
China
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WORRY ABOUT CHINA’S DEMOGRAPHIC SITUATION
China
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DEMOGRAPHICS ARE BETTER FOR OTHER PARTS OF ASIA
China
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Michael McDonoughChief Economist, Financial ProductsBloomberg LPEmail: [email protected]: 212-617-6815
@M_McDonough
