‘This Could Trigger An Actual Recession’: Folks Are Getting Worried About Germany

For quite a while, the big (if wholly self-evident) worry for markets was that the global factory slump would spill over into the services sector and then, into the labor market. On Wednesday, there were some signs that's beginning to happen. "Still solid growth in the service sector means that the German economy is just about keeping its head above water for now, but even here there are signs of increased worries among companies as optimism hit a three-and-a-half year low", Phil Smith, Princip

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5 thoughts on “‘This Could Trigger An Actual Recession’: Folks Are Getting Worried About Germany

  1. the threat to equities is a real recession. the current thinking is that this is a slowdown similar to winter 2015/2016 and that the economies will rebound with a little help from central banks. the problem is there might not be much upside even if this does come to pass since we are already approaching a forward P/E of 18 on SP500. if the economy really does head south.. look out below. but i don’t think the recession will happen. i think we bottomed in Q2, but we will still be in the 1.0% to 2.5% growth rate for the foreseeable future. so constantly susceptible to growth scares and near recessions.

    1. I have to disagree with this post. If the trend in growth is down, even if recession is avoided, equities will be affected due to lower earnings growth or outright earnings declines.

  2. This is a central bank liquidity driven equities market that seems impervious to traditional valuation metrics… the bulls will find good news in the bad news….

  3. It seems to me that Germany is a rather special case. The Germans have only one product worth mentioning: cars. Thats fine as long as Chinese and American buyers line up to buy them. Right now, that is not the case. Blame it on the diesel cheating, Chinese going electric, Americans buying cheaper domestic and Asian SUVs and trucks – whatever. It doesnt matter outside of Germany (IMHO).

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