VIEW: J.P. Morgan write that "the US econ has...>

FED: VIEW: J.P. Morgan write that "the US econ has continued to perform

reasonably well: GDP source data for Q3 have been modestly encouraging & we exp.

a solid 150,000 gain in Friday's jobs report. Even so, the outlook has been

darkening. We now exp. the Fed to lower the funds rate by 25bp at each of the 3

remaining meetings this year. Among the reasons; tensions continue to intensify,

foreign growth forecasts continue to get marked down & the USD continues to

strengthen. Signs of domestic fallout are mounting. Yesterday's < 50 ISM reading

was the latest figure indicating that the goods-producing sector continues to

take it on the chin. More fundamentally, however, recent downward revisions to

estimates of econ growth, corporate profits & employment growth all suggest that

the econ is displaying classic late-cycle symptoms. Moreover, these symptoms are

unlikely to go away entirely even if a truce is reached in the current trade

tensions. While the broader econ has been resilient in the face of those

tensions, the narrowing in revised corporate profit margins suggests businesses

will have only limited tolerance for further adverse shocks before they begin

economizing on labor costs, which would slow consumer spending growth."