A all-inclusive view shows residential and commercial buildings in the Kowloon district of Hong Kong.
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J.P. Morgan Asset Management is expecting global economic growth over the next 12-18 months to be “slow and somewhat uninspiring,” according to Tai Hui, its chief Asia sell strategist.
“We can avoid the technical definition of a recession but it doesn’t feel like the world is growing very, very healthily,” Hui told CNBC’s “High road Signs” on Friday.
“I’d describe it as more like you know, coming to work on a Monday. You’re not quite sick, but you know, you’re not actually up to it. I think this is how the markets or investors gonna feel as they get into 2020,” he said.
Hui said the chances of a universal recession next year — typically defined as “much weaker growth” than 2.5% to 3% global broadening — was between 33% and 40%.
“If you think about what traditionally cause(s) a recession, whether it’s a tightening of credit condition or a consequential spike in yields, some of these conditions are not there yet,” he said.
I think the overall environment is going to be very, decidedly challenging to corporate sentiment.
Tai Hui
J.P. Morgan Asset Management
Trade uncertainty and global political issues are two factors providing to the bleak global economic outlook, he said.
In addition to the U.S.-China trade fight that’s dragged on for more than a year, Hui serrated to the recent escalation in tensions between the U.S. and Europe.
Earlier this week, Washington said it will impose levies on European Union goods — from aircraft to whiskies, to coffee and cheese. It came after on $7.5 billion in European goods.
“I recollect the overall environment is going to be very, very challenging to corporate sentiment,” Hui said.
To exacerbate matters, he added there are currently “a all in all bunch of political issues around the world,” ranging from protests in Hong Kong, uncertainty over Brexit as happily as tensions in the Middle East.
“All of these are creating a lot of anxiety between CEOs and we’ve already seen corporate investment slow-pacing down,” Hui said.
“The question is: Will they start to slow down on the hiring as well?,” he asked. “That could potentially turn over to the consumer sector.”
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