Original title: us industrial and commercial investment stagnant? GDP may be dragged down gold is still fragrant steamed bun, pay attention to ISM manufacturing data during the day
The latest Fed data show that US business and industrial loan growth was weak in the second half of 2019, indicating that the industrial recession is still plaguing the US economy as a whole. And there is more evidence that the trend is likely to continue into 2020, which could exacerbate the US recession at a time of industrial recession, putting pressure on the dollar and boosting gold prices.
The ISM manufacturing PMI will be released in the United States within days, and if the data is not good, it could exacerbate market expectations of a decline in corporate investment.
The initial GDP of the United States in the third quarter of 2019 was only 1.9%, as weak industrial and commercial investment seriously dragged down the US economy. But there are growing signs that the trend continued in the fourth quarter.
Us business loans rose 1.6 per cent to $2.4 trillion in December, with most of the growth in the first half of this year. As for the second half of the year, there is no sign of an increase in lending in the industrial sector.
British media said that commercial real estate loans from small and medium-sized banks increased slightly, but larger banks declined. The slowdown in industrial and commercial loan growth in 2019 is a direct result of the intensification of the industrial recession in the second half of the year.
Note: the quarterly growth of industrial and commercial loans slowed rapidly in 2019 and has recently contracted.
Note: the annual growth rate of industrial and commercial loans fell from the highest level in the fourth quarter of 2018 to the level considered stagnant in the fourth quarter of 2019.
Note: changes in assets and industry loans of American commercial banks
JPMorgan Chase & CoJennifer Piepzak, chief financial officer, said business confidence had risen since optimism about international trade rose in the autumn of 2019, but uncertainty about an economic rebound remained.
"of course, the progress of international trade will continue to be the primary factor in the direction of economic and business investment in the future, but the US election will contribute to the uncertainty of the market environment in 2020," Piepzak said. "
Capital spending by S & P 500 companies rose 1% in the fourth quarter of 2019, well below the 12% growth a year ago, according to Refinitiv, a clear sign that Trump's tax reforms have significantly diminished the stimulus effect on the economy.
Capital expenditure is the main driving force of industrial and commercial loans. Still, because of the great uncertainty in the global economy and the industrial recession caused by the US economic slowdown, executives have chosen to buy back shares rather than build factories.
"We just don't see a lot of capital expenditure, and it's likely to remain depressed by 2020," said Brian Klock, a bank analyst at Keefe,Bruyette&Woods. "
Since the beginning of 2019, industrial and commercial loan growth at America's top 25 banks has been poor. Brian Forlan, an analyst at Autonomous Research, attributes it to the uncertainty of international trade. Forlan also said low demand for credit in the oil and gas sectors was another important reason for the economic slowdown.
With capital spending unlikely to rise significantly in the short term, forcing a slowdown in industrial and commercial loan growth during an industrial recession is likely to hurt the US economy, which could lead to low growth in 2020.
At 16:30 Beijing time, spot gold was reported at US $1543.60, an increase of 0.95%.