• Global growth is the primary concern but other risks are also a concern;
  • Growth in developed economies and China are being revised down. Not surprisingly global growth is also being revised down;
  • Relevant risks in the horizon also involve Brexit, interest rate policy by the FED, margins and earnings of companies, oil prices and the stability of the financial system;
  • Oil and Gas companies hold a face value of $192 billion in high yield debt with a market value of $79 billion. Defaults in the segment will increase and challenge the solvency of the financial system and banks.




  • New bank loans expanded by 89% in March, led by the People Bank of China, to support economic activity. No wonder GDP grew 6.7% in the first quarter (Q1);
  • Transition to new consumption based model abandoned in the last few months;
  • Better financial practices are reducing volatility in the short run. Capital outflows were reduced to $30 billion in March from $100 billion in January;
  • However, total debt outstanding at 240% of GDP is a time bomb likely to raise problems in the long run.


  • FED keeps rate in last meeting, suggesting econ activity has slowed with household spending moderating;
  • GDP Q1 grew 0.5%, well below expectations, with biz investment falling 3.5% - third fall in a row. With company margins falling, GDP should grow less than 2% in the current year;
  • Real Estate markets softening, both pricewise and in home sales;
  • Eventually no rate hikes by the FED in 2016, but a single 0.25% hike likely in the last quarter. Treasury rates adjusting down;
  • Everything conspires to a weakening USD.