The next US economic recession

Most fund managers surveyed by Bank of America think the next US recession could break out in the second half of 2019 or early 2020 (https://www.ft.com/content/0b6410fa-8f52-11e8-b639-7680cedcc421). If this story is true, then the current financial market is vulnerable. Fund managers are the major players in the global financial market, the market can move in the same direction they expect since they are influential especially when most of them agree with each other.

The US stock market is still booming, especially at the moment the earnings release period is on its way, led by an excellent Google quarterly earnings report despite it has paid $5bn fines to the European Union. We can expect the market right now is optimistic about other companies' performances for last quarter as well as the coming future; therefore, the US stock market is highly likely to continue its current growth trend.

However, since many fund managers are aware of the coming economic recession, they will be cautious about their activities. They are all guessing the right time point where they start to sell off their holding assets. No one wants to move too early because it will make them suffer incredible opportunity losses, as they give up the potential gains from the current good era; however, no one wants to move too late because they will suffer losses from the US economic recession.

A non-cooperative massive scale of sell-offs can happen at any time when most fund managers think a recession is coming in the near future and they tend to do herding in the financial market.