JPMorgan's investment-strategy chairman lays out 3 reasons why the US will avoid recession through 2020

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But not all are convinced that a day of reckoning in the US economy is upon us — and one prominent investment strategist thinks the market is overlooking underlying strength. The US yield curve"is not as reliable a signal at a time when 70%-100% of European and Japanese government bonds trade at negative yields, driving up demand for long duration US assets," he said in a recent client note.

Against that backdrop, Cembalest provides three reasons he thinks the US will side-step a near-term economic catastrophe.With unemployment hovering around a 50-year low, and wage growth pushing above 3%, the US consumer remains a strong, foundational component of economic growth. Remember, consumer spending accounts for about 70% of GDP. Without a material slowdown in spending, a recession is unlikely to rear its ugly head.

The graph below shows how multinational corporations are side-stepping the impact of US tariffs in China.As a plethora of global central banks continue to demonstrate their willingness to cut interest rates, Cembalest sees a rebound in manufacturing coming down the pike.

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