There’s no doubt that today’s world economy is slowing, with deceleration under way across China, Europe, Japan and more latterly the US. The numbers don’t lie. Equally, global growth is under threat from the expanding US-China trade war. However, are we to believe the frightening headlines predicting that a global recession is imminent? Should investors start selling their equities with the expectation that stock markets will now plummet? At Prudential, we believe the answer to these questions is no, and here’s why.

First, some pundits have said that because this is now the longest expansion in US history at over 120 months, we are “due” for a recession. But economic cycles don’t have schedules. They don’t happen in a routine way, so the length of a recovery should not be a predictor of the next downturn. As we have seen recently, central banks have quickly reacted to add more monetary stimulus as necessary, protecting the recovery and extending it...

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