On the Global Economy and Investing
Last week, FedEx Corp. CEO Raj Subramaniam said:
“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S."
Separately, World Bank Group president David Malpass said:
“Global growth is slowing sharply, with further slowing likely as more countries fall into recession.
“My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies.”
Also, Bridgewater Associates founder Ray Dalio said:
“With inflation well above what people and central banks want … it's obvious that inflation is the targeted problem ...
“I estimate that a rise in rates from where they are to about 4.5 percent will produce about a 20 percent negative impact on equity prices …
“the inflation rate will stay significantly above what people and the Fed want it to be … interest rates will go up, other markets will go down, and the economy will be weaker than expected.”
Finally, Carlyle Group co-founder David Rubenstein said:
“Really skilled investors I think are buying things now at the bottom of the market -- or close to the bottom of the market ...
"When markets are in trouble -- as they are now, you could argue -- now is probably a pretty good time to invest ...
“If you’re really investing you’re not going to be able to avoid losses at some point … Even Warren Buffett has lost money on investments. You have to be in the game.”
OUR TAKE
With its global reach, FedEx’s CEO reinforces the view of global economic challenges (although, they may have company specific issues as well.)
Getting inflation “under control” will challenge businesses, policy makers and consumers. This process may extend into 2023 – and during this period, global markets will remain volatile.
Regarding investing - markets may not have bottomed out, but Rubenstein’s perspective aligns with the contrarian view that "the time to buy is when there's blood in the streets."