It’s been a tough month for the stock market.
The Dow Jones industrial average is on pace for its worst December showing since 1931. For the week of Dec. 17-21, the Dow fell 1,655 points, or 6.9 percent. That’s the steepest one-week loss since October 2008 … you know, that financial crisis we’re still talking about.
And while the economy in general remains strong, there are some troubling signs out there.
The stock market is just one. A recent New York Times survey of 134 business leaders at the Yale CEO Summit found that almost half of the CEOs who responded believe the next U.S. recession could happen by the end of 2019.
Happy New Year.
That has folks like Peter Franchot worried. Maryland’s comptroller is warning anyone who will listen that the state needs to be socking away money now, before the next downturn strikes.
At the Maryland Association of CPAs’ annual Comptroller’s Luncheon on Dec. 3, Franchot said the state is expecting a windfall of more than $1 billion, thanks to the 2017 Tax Cuts and Jobs Act. He encouraged CPAs to urge their elected officials to put that money in a “rainy day fund” … just in case.
“I, like everybody, want to spend money on education and transportation and infrastructure and the needs of our people,” Franchot said. “That is always something that the legislature and elected officials want to do. I just think we need to be very cautious given the situation globally and nationally.”
Franchot repeated that suggestion at a later meeting of Maryland’s Board of Revenue Estimates, saying, “Nobody is in favor of recessions, but winter is coming. So, let’s prepare.”
It seems like a prudent move. The question is, are we really edging toward recession?
Wall Street analysts seem remarkably bullish about 2019, if you believe this MarketWatch article.
On the other hand, yet another MarketWatch article says you can’t be too sure at this point about what’s going to happen.
The bottom line, apparently, is this: Your guess is as good as mine.
Which means it might be a good idea for Maryland to sock away some of that $1 billion after all.