Three Risks Investors Should Be Watching

Earlier this month, my fellow strategist Byron Wien and I hosted our Q1 webcast, where we discussed the Ten Surprises of 2020 and our outlook for economics, politics and the markets in the months ahead. These webcasts also give us an opportunity to explore risks to growth and market sentiment. Looking through our research this quarter, I see three risks that stand out. Here are a few key charts that tell their story.

#1: Cracks in the Labor Market

The US labor market remains strong, and unemployment is at 50-year lows…

…but there are some cracks emerging. Growth in temporary staffing levels, an official leading indicator for the labor market, is at its lowest level since the Global Financial Crisis.

#2: Growing Global Debt

Global debt has hit record levels, and has increased significantly across major economies over the last several years. However, this debt is having limited impact on economic growth. 

#3: Inflation Pressures

Inflation data are currently sending mixed signals, but the core and “sticky” measures of CPI are growing faster than 2% and rising. This increases the risks of higher bond yields.

These are just a few of the trends Byron and I discussed in the webcast. You can check out our full Q1 2020 presentation and view the webcast here.