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Duke Poll: 69% of Corporate Finance Chiefs Predict 2020 Recession

Duke Poll: 69% of Corporate Finance Chiefs Predict 2020 Recession
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By    |   Wednesday, 12 June 2019 03:18 PM

Two-thirds of chief financial officers responding to the most recent Duke survey see a recession hitting the U.S. by the end of 2020.

Along with growth slowing, they also see the prospects for their individual businesses dimming, CNBC reported.

The results contrast with small business sentiment, which remains high.

Some 48.1% now see negative growth by the second quarter of 2020, according to the latest Duke University/CFO Global Business Outlook survey.

The results show that 69% figure a recession will start before the end of next year, which is roughly consistent with the previous survey in April that showed 67% were anticipating a downturn by the third quarter of 2020.

”“The numbers may fluctuate slightly, but this is the third consecutive quarter that U.S. CFOs have predicted a 2020 recession,” John Graham, a finance professor at Duke’s Fuqua School of Business and director of the survey, said in a statement. “It’s notable this quarter how strongly recession is being predicted in other parts of the world.”

The results come as many economists believe U.S. growth is weakening from its strong, nearly 3% pace in 2018 and the 3.1% gain reported in the first quarter of 2019.

The Duke poll is far from the lone recession warning to recently hit the headlines.

A survey of investors at JPMorgan Chase & Co.’s U.S. Macro Quantitative and Derivatives Conference in New York on May 17 found 23% of respondents expect the next recession after 2021, though 33% see it in 2020 and 37% in 2021, Bloomberg reported.

The JPMorgan poll also found 36% of respondents picking a liquidity plunge and 25% fearing political or geopolitical risks most, according to the conference summary from strategists Marko Kolanovic and Dubravko Lakos-Bujas.

About 59% of those answering saw the 10-year Treasury yield between 2.0%-2.5% at year-end, while 39% expected the S&P 500 between 2,800 and 3,000.

However, other respected economic voices aren't as pessimisitc.

Glenn Youngkin, who co-leads Carlyle Group LP, said the global economy is slowing but not stalling and that the U.S. can continue to grow at 2%. “It gives us a fair amount of confidence there isn’t a recession around the corner,” he said at the recent SuperReturn U.S. East conference. “We don’t see it this year or next year," Bloomberg quoted him as saying.

The co-chief executive said rising asset prices have made the climate for private equity investing as tough as it’s ever been. Washington-based Carlyle, which oversaw $221.5 billion in assets at the end of the first quarter, is sitting on billions of dollars to invest in a frothy deal environment.

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Two-thirds of chief financial officers responding to the most recent Duke survey see a recession hitting the U.S. by the end of 2020.
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2019-18-12
Wednesday, 12 June 2019 03:18 PM
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