Top Wall Street analyst says the US economy is on its way to a recession when shares fall due to concerns about Trump's trade war with China
- Morgan Stanley equity strategist says 2019 can be a difficult year for the economy
- Indicators indicate a fall in production and "delays" in the service sector
- Shares fell on Wall Street on Tuesday due to trade dispute concerns
Morgan Stanley, one of the best investment firms on Wall Street, predicts a downturn in the US economy due to ongoing trade disputes and poor market indicators.
The bank issued a report on Tuesday warning that corporate earnings and economic growth are being compromised.
& # 39; Recent data suggests that US earnings and economic risk are greater than most investors think & # 39 ;, wrote Michael Wilson, Morgan Stanley's stock strategy manager.
Wilson, who quoted a recent survey from financial data firm IHS Markit, says production activity fell to a low of 9 years in May.
He also writes that there was a & # 39; notable delay & # 39; in the US services sector, which constitutes the bulk of the domestic economy.
Morgan Stanley, one of the best investment firms on Wall Street, predicts a downturn in the US economy due to ongoing trade disputes and poor market indicators. The Morgan Stanley headquarters can be seen upstairs in Times Square in New York City
Wilson & # 39; s findings are based on information reported in April, & # 39; meaning it weakened before the re-escalation of trade tensions [with China]. & # 39;
& In addition, many leading companies can throw in the towel during the second half of the rebound – something we expected, but we believe that many investors are not. & # 39;
According to CNBC, Wilson is considered one of the most accurate strategists on Wall Street.
He correctly predicted that the S & P500 index would reach 2,750 by the end of 2018.
That is why his predictions of a & # 39; roiling bear market & # 39; be involved with Wall Street investors before 2019.
US equities closed lower on Tuesday, with the first gains giving way to declines as the likelihood of a lengthy trade war between the United States and China once again kept risk appetite under control.
President Trump said Monday that he & # 39; not ready & # 39; is to close a deal with China, although he expected that this could be achieved in the future.
An expanding tariff battle between the two parties has raised concerns that the trade war would lead to a global economic slowdown.
US equities closed lower on Tuesday, with the first gains giving way to declines as the likelihood of a lengthy trade war between the United States and China once again curbed risk appetite
& # 39; The market is holding up well, but then the weak hands will take over on the late day & # 39 ;, said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
& # 39; Choose a concern and it will continue to grow and manifest, whether it be trade or consumer confidence, thinking that those people did the survey before the Chinese things hit the fan. It is clear that it is all about trade. & # 39;
Consumer confidence jumped in May as households became more optimistic about the labor market, although economists said the strong readings were unlikely to fully absorb the impact of the trade-stalemate between Washington and Beijing.
The uncertainty has pushed investors to safe-haven assets, resulting in a benchmark that the 10-year US Treasury yields fell to the lowest level since October 2017, while the spread between the 10-year and 3-month accounts narrowed to nearly 12 year low.
The majority of the 11 S&P sectors were in the red, with only communication services on the positive side.
The Dow Jones Industrial Average fell by 237.32 points, or 0.93%, to 25.308.37, the S & P 500 lost 23.91 points, or 0.85%, to 2,802.15 and the Nasdaq Composite dropped by 29.66 points, or 0.39%, to 7607.35.
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