J.P. Morgan Chase & Co. is an American multinational investment bank and financial services company headquartered in New York City. JPMorgan Chase is the largest bank in the United States, and the sixth largest bank in the world by total assets as of 2018, to the amount of $2.535 trillion. It is the world’s most valuable bank by market capitalization and was named one of the top stocks to buy in 2019.
The Morgan Stanley Business Conditions Index (MSBCI) is an economic barometer based on an internal monthly canvass of industry analysts in JPMorgan’s North America Equity Research. The MSBCI measures general analyst sentiment as well as component indicators that gauge financing, advance bookings, pricing, hiring, capital spending, and expectations. Since its inception in June 2002, the MSBCI has served as a valuable and effective instrument for anticipating directional moves in the U.S. economy.
Morgan Stanley just published its latest Business Conditions Index and it is shocking.
As reported by Maggie Fitzgerald for CNBC, June 13, 2019:
Morgan Stanley’s Business Conditions Index, which captures turning points in the economy, fell by 32 points in June, to a level of 13 from a level of 45 in May. This drop is the largest one-month decline on record and the lowest level since December 2008 during the financial crisis, according to the firm.
Morgan Stanley said June’s conditions index reading showed notable declines in hiring, hiring plans, capex plans, and business conditions exceptions.
Economist Ellen Zentner said in a note to clients that the sharp MSBCI decline “shows a sharp deterioration in sentiment this month that was broad-based across sectors. Fundamental indicators point to a broad softening of activity, but analysts did not widely attribute the weakening to [Trump’s] trade policy.”
In addition to the sharp drop in the Business Confidence Index, here are other economic indicators of a possible economic slowdown:
- Last Friday’s much-worse-than-expected jobs report from the Labor Department, showing that the U.S. economy added just 75,000 jobs in May.
- A report on Thursday showed a spike in jobless claims last week.
- Manufacturing activity last month grew at the slowest pace in two years.
- The manufacturing subindex business conditions fell sharply to zero, the lowest level for the subindex on record.
- The services subindex also fell to 18 from 35.
Meanwhile, another CNBC report on June 12 says “risks are rising for an oil price spike as tensions between the U.S. and Iran increase” which would further exacerbate business confidence.
Analysts say oil could be more than 10% higher, but if the situation in the Middle East intensifies, there are risks of price spikes that take oil to as high as $100 a barrel this summer.
Four years ago, in June 2015, Bob Johnson wrote in Veterans Today that the powerful Israeli lobby, American Israel Public Affairs Committee (AIPAC), was trying to push the U.S. into a war against Iran for Israel’s benefit. (See “Yinon Plan“)
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