Absolute Return Partners raises US recession fears despite trade war truce
– Founder and CIO Niels Clemen Jensen flags up potential liquidity squeeze –
ARP founder and chief investment officer Niels Clemen Jensen is flagging up the risk of a US recession amidst a potential liquidity squeeze among lower-quality US corporates.
Jensen warns in ARP’s January note that tighter lending faced by lower-quality stocks in the US has put pressure on corporate debt levels lately, with many such companies turning to cash to run their businesses. As a result, corporate debt levels – which have been rising in recent years – could once again begin to fall, putting the squeeze on liquidity.