Business Cycle Update

First Quarter 2020

Mature but Less Synchronized Global Business Cycle

The global economy remains sluggish, but we see signs that conditions are no longer deteriorating. The U.S. is firmly in the late-cycle phase, whereas recessionary conditions in major European nations such as Germany and Italy may be poised for improvement. Overall, the global cycle remains in a mature expansion but with hints of improvement in some areas along with signs of a bottoming in global trade and industrial activity.

  • Activity rebounds (GDP, IP, employment, incomes)
  • Credit begins to grow
  • Profits grow rapidly
  • Policy still stimulative
  • Inventories low; sales improve
  • Growth peaking
  • Credit growth strong
  • Profit growth peaks
  • Policy neutral
  • Inventories, sales grow, equilibrium reached
  • Growth moderating
  • Credit tightens
  • Earnings under pressure
  • Policy contradictory
  • Inventories grow; sales growth falls
  • Falling activity
  • Credit drives up
  • Profits decline
  • Policy eases
  • Inventories; sales fall
BCUInflationaryPressuresRed =HighRelativePerformanceofEconomicallySensitiveAssetsGreen =Strong+EconomicGrowth-RECOVERYCONTRACTIONEXPANSION Spain Brazil, Australia, Canada France U.S., Japan, South Korea U.K. Mexico, India China* Germany, Italy

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