Contrary to optimistic stock market signals, global economic troubles are intensifying, especially in the U.S. and China, with looming challenges in public finance and property markets, per commentary from American Enterprise Institute.

The issue:  

The world economy faces significant challenges as the U.S. public finances are on an unsustainable path, with a projected budget deficit above six percent of GDP for years. China is also suffering from a housing bubble collapse, resulting in slower growth and declining property values.

What they recommend:  

No recommendations provided in the commentary.

Go deeper:  

The potential for a trade war initiated by the incoming Trump administration could severely impact both the U.S. and Chinese economies, further escalating tensions. In Europe, existing economic weaknesses, particularly in Germany and Italy, coupled with political dysfunction, could spark another Eurozone debt crisis. This complex landscape raises questions about the current high stock market valuations, echoing historical instances where markets failed to predict economic turmoil. 

This is a brief overview of a blog from American Enterprise Institute. For complete insights, we recommend reading the full blog.