• In Europe, where the economy was growing at close to 2% last year, business activity has tapered off. The United Kingdom faces growth of 1%, compared to a level of twice that before the Brexit referendum. In the final Brexit outcome, I expect that the European Union will avoid placing punitive trade measures on the U.K. because both sides would be hurt and they are already vulnerable.
• One of the most important tenets of my current view is that the next recession will probably not occur until after the election in 2020
• The stock market may anticipate the downturn and begin to weaken well before the recession starts. Average hourly earnings have moved up to a 2.9% increase year-over-year, but that is still a long way from the 4% annual increase that has proven to be a warning signal for more inflation and more Fed tightening in past cycles.
• Economically speaking, there are several ways for any country to compete globally: (1) attractive demographics, (2) productivity growth, (3) low cost of production, or (4) rich natural resources. Many emerging markets have three or even all four, but virtually no developed market has more than one.

• Oftentimes a bullish secular story becomes overshadowed by shorter term forces and the resulting market decline carries with it its own set of fears. This pullback in emerging markets is no different as investors worry over trade tariffs, U.S. Fed policy and the strong dollar.

Source: Blackstone