Pub. 10 2019 Issue 4

www.wvbankers.org 22 West Virginia Banker Stay Vigilant and Focus on the Fundamentals O ver the past few weeks, stocks have rallied and Treasurys sold- off as relations between the United States and China showed signs of improving, rekindling hopes of a trade truce and economic growth. We always say that risk managers can hope for the best, but they’re paid to prepare for the worst. In this spirit, it’s important to remember that euphoria is an emotion, not a fundamental data point. The U.S.-China trade war continues to weigh heavily on global economic growth. The International Monetary Fund (IMF) recently trimmed its 2019 global growth forecast to 3.0%, the slowest pace since the financial crisis. Growth is expected to rebound to 3.4% in 2020, though the IMF identified sev- eral downside risks that could trigger a “much more subdued pace of global activity” next year. Here at home, the U.S. economy ex- panded at a 1.9% annual rate in the 3Q, adjusted for inflation and seasonality. This comfortably beat the consensus expectation for 1.6% growth, with By Scott Hildenbrand, Sandler O’Neill + Partners