US-China economies on the verge of recession, warns US investor

Washington/Beijing – Cathie Wood, a leading investor from the United States, warned that the US economy is possibly going into recession and the Chinese economy is also being hit. Whereas, British investor Jeremy Grantham cautioned that the US stock market is in the last stage of the Super Bubble and the market may suffer a loss of $35 trillion in the next few months.

The shadows of the Coronavirus pandemic are still looming over many countries, including the United States. Lockdowns and other restrictions are in place in many countries at different levels, affecting production and supply. The costs are rising given the high demand and low supply. Besides, the inflation index in many countries is scaling record heights. There has been an increase even in the fuel rates and predictions are that the fuel rates will soon reach $100 per barrel. Against this background, the warnings issued by British and US investors become significant.

Cathie Wood is the founder and Chief Executive Officer of the US company Ark Investment Management LLC. The expertise of the company is investments in technology-based industries. Wood has warned of the possible upheavals in the global economy in the company’s quarterly report. The Yield Curve that indicates the return and interest on the short and long-term Treasury Notes is flattening and Wood claimed that this is an indicator of the impending recession.

Wood also pointed to the real estate crisis developing in the Chinese economy, the second-largest economy in the world. The founder of Ark Investment Management LLC warned that this could slow down the Chinese economy. Wood claimed that the other emerging economies of the world would also be hit along with the Chinese economy.

Following Wood, leading British investor, Jeremy Grantham warned of a crash in the US stock market. Grantham warned that the US stock markets have been in a ‘super bubble’ for the last few years and the bubble is about to burst. He also claimed that the bullish phase in the US and other stock markets was due to the interest policies adopted by the Federal Reserve and the countries’ central banks. Grantham said that there are indications that the Federal Reserve may increase the interest rates in the next few days, and this will have repercussions in the stock markets. He also warned that the market crash could result in losses worth $35 trillion.