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Synchronized Global Slowdown And Peaking Profits: McLennan & Hyman

Ed Hyman & Matthew McLennan in part 2 of our exclusive interview discuss the synchronized global slowdown and a cathartic market decline. Also a more cautious note about peaking corporate profits, still rich market valuations, and extremely high levels of debt which can slow growth. WEALTHTRACK #1527 broadcast on December 21, 2018.

Hyman & McLennan synchronized global slowdown
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2019 Global Outlook: Synchronized Global Slowdown and Peaking Profits. A McLennan & Hyman Exclusive

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Transcript

Hello and welcome to this edition of wealth track. I'm Consuelo Mack. This week we present part two of our exclusive annual outlook with Wall Street's number one economist Ed Hyman and global value manager Matthew McLennon. Now if you missed Part 1 last week which was on the state of the U.S. economy and markets here are hymens highlights a U.S. recession is several years away. We're in the midst cycle of our economic recovery.

Interest rates are still low and inflation is not evident. A more cautious note was struck by leading global value investor Matthew McLennan who is worried about peaking corporate profits. Still rich market valuations and extremely high levels of debt which can slow growth with even small interest rate increases. Ed Hyman is founder chairman and head of Economic Research at Evercore ISI. It has been ranked the number one economist on Wall Street for a record setting 38 years and institutional investor magazine's survey of professional investors.

He is joined by leading global value investor Matthew McLennan who heads the Global Value team at First Eagle investment management and is portfolio manager of several funds including the flagship First Eagle Global Fund which has beaten its World Allocation Fund category and its benchmark on both a total return and risk adjusted basis since he took over the fund in 2008 from legendary investor John Marinova yard. This week our focus goes global. The U.S. led the recovery out of recession in 2009 and it is leading it once again. After a couple of years of synchronised and accelerating global growth much of the rest of the world is slowing after outpacing the US in 2016 and 2017.

The 19 nation eurozone is lagging. The European Central Bank recently trimmed its growth forecasts as it attempts to end its massive an unprecedented four year stimulus program. China the world's second largest economy is also slowing as it grapples with the challenges of overbuilding high levels of bank and government debt and concerns over trade disputes with the EU. As I began part two of our discussion by asking our guests to give us a new headline to replace the old synchronised global growth theme.

So I haven't used that headline since about March of last year. It was quietly put to bed. The growth is anything but synchronised now with Europe being slow. China slowing and the US still doing pretty well. If you add the three together the tagline is a global slowdown. Right. And I guess that would probably persist and you know into 2008 19 I think the U.S. is going to slow you know about a percentage point from 3 to 2. And I don't really see.