Opening Statement from the April 2019 Dividend Gems 

Opening Statement from the April 2019 Dividend Gems 

Originally published on April 14, 2019

Overview

Consistent with previous forecasts, the US economy continues to show signs of weakening after coming out of a relatively strong year in 2018. With the impact of the fiscal stimulus poised to weaken from here, trade uncertainty along with the continued trend of global weakness is likely to further restrict growth. However, we do not see much of a chance of a recession in 2019. While the odds for a recession in 2020 are considerably higher, a great deal depends on the timing of the current trade disputes.

As previously discussed in our market forecasting research from March, although the IMF lowered global growth estimates for 2018 from 3.7 percent to 3.5 percent in its January WEO Update, we believed this reduction was insufficient and thus would be revised further downward. In its April 2019 WEO, the IMF did in fact lower its estimate for global growth from 3.5 to 3.3 percent. Note that in its October WEO report the IMF estimated 2019 growth at 3.9 percent. This represents a substantial reduction in estimates over a 6-month period.

We believe the IMF’s most recent revision to its 2019 global growth estimates to be a more accurate reflection of the current state of the global macroeconomic environment. The IMF has not yet reduced growth estimates for 2020 since its January reduction from 3.7 to 3.6 percent. But we believe a best-case scenario for growth in 2020 would be 3.5 percent. And if trade frictions continue beyond the summer of 2019,