Sunday, December 29, 2019

Just Own Something: Hyman & McLennan Global Outlook Part 2 Interview

Consuelo Mack of WealthTrack conducts Part 2 of her interview with Ed Hyman, Vice Chairman of Evercore and Matthew McLennan of First Eagle Investment Management. I published highlights and a link to Part I of the interview last week that focused on the U.S. outlook and below is the link to the Part 2 interview that focuses on the Global outlook. Not surprisingly, China gets a lot of attention from Ed and Matt, but Ed Hyman is cautious on the outlook for China, i.e., growth but slowing growth. Ed does not believe China and trade issues are a game changer to his positive 2020 outlook.

It is often said one should not fight the Fed. In other words with the Federal Reserve easing again, this policy position is generally favorable to growth. As Ed notes, policy makers around the world are attempting to extend the expansion with their easing positions. He states, "investors should just own something" with so much money in the system that it is likely to push up the value of a lot of investments. He does admit though, and he states it more bluntly in the below interview, at some point this all may not end well. Ed Hyman's view is shared by other economists as well.

In a recent article by Ed Yardeni, Ph.D. of Yardeni Research and titled, Central Banks Likely to Keep Santa Claus Rally Going in 2020, Yardeni writes, "don’t fight the three major central banks, i.e., the Fed, the European Central Bank and the Bank of Japan." All three central banks are pursuing easing policies at the moment.

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