Recession in Europe – again?
The eurozone economy has suffered a weak start to the year, with high coronavirus infection rates and government restrictions increasing the risk of a second recession since the pandemic first struck last year. Fresh Covid-19 outbreaks that authorities have struggled to contain are continuing to weigh on economic activity and have damped expectations for a strong global recovery in the first half, a reality that US Investors, so far, have refused to face.
In the early months of the year, a number of large economies face the threat of declining output as restaurants, cinemas and a wider range of businesses that involve close physical proximity are closed or have had their activities severely curtailed. Data firm IHS Markit said its Composite Purchasing Managers Index, which measures activity in the manufacturing and services sectors, for the eurozone fell to 47.5 in January from 49.1 in December. A reading below 50 points to a decline in activity.
A similar survey for Japan pointed to a bigger contraction in the services sector, while figures for the U.S. to be released later Friday are expected to point to a slowdown in the services recovery.
Seriously people – we're not shocked by this, are we? Most of the investing community is playing ostrich and have been keeping their heads firmly in the sand and pretending the vaccines will somehow "fix" everything but we've had flu vaccines for decades and, guess what, people still get the flu! We are simply refusing to have realistic discussions about our future because it's just too depressing to contemplate but to go the opposite way and invest as if things could not possibly be brighter for our near-term future is simply foolish.
We are still in the middle of a Global Catastrophe and it is NOT fixed. We haven't even seen the real repurcussions of the damage it's caused because we are filling all our economic holes with endless supplies of money and we're acting as if that has no long-term consequences. Now that Joe Biden is President, the GOP is worried about the debt again and is seeking to block his $1.9Tn spending program. Then where would we be?