2019 ROI First Quarter Edition 2019 - HIS Capital Group | Page 6

Q4 2018 – Q1 2019 WAS THE THIRD “MINI RECESSION” OF THIS
LOOOOOOOOOONG EXPANSION
It’s a wonderful time to be alive. The jobs market is the best we’ve seen in 30 years. If you want a job, there’s
one for you. Inflation – although calculated incorrectly – is below 2% and slowing. The housing market ended
2018 with a thud and hasn’t really gained any new steam through the first 3 months of 2019. Equity markets just
finished their best quarter since 2009. Short-term interest rates are nowhere near as low as they were a couple
of years ago, but still a way away from being “high”. The 30-year mortgage rate is lower now than 6 months ago.
It is as though we are living in a Goldilocks age. The economy is almost too good, which is no doubt why some
analysts have been clamoring for an overdue recession.
The good times, of course, always come to an end. And sometimes that end can be quite harsh. Potential storm
clouds sometimes seem far off in the distance, but such a view can change on a dime. Growth out of China was
“very slow” to end 2018 and to start 2019 1 . Recent indications on factory output are less concerning. A hard
Brexit could ripple through at least the European economies. Global debt, now at $245 trillion, could force the
global economy into a deep, deep recession should too many cracks break open. Policy missteps or mistaken
confidence could spark a fire that can’t be squelched without a recession.
All in all, the American economy is fine and gaining steam again. The many potential risks could change that
quickly, but don’t bet on it. We’re entering the long awaited boom now.
1  “Very slow” growth out of China means growth below 6%. The PBOC’s official GDP growth rate target is 6.5%.
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