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Katherine Ross: I'm wondering what other data points should investors be watching, you know, to protect themselves in this volatile market?

Michael Kushma: Well, one is also the corporate performance. The weak link in the global economy is CaEx. It's supposed to be a strength so after the big corporate tax reform, corporate tax cuts we saw in the US in 2018. We saw a surge in after tax earnings on many US companies. CapEx was picking up very sharply and then the trade war began and basically with all the uncertainty about the future and where do I invest, what country do I invest in? Do I have to move my suppliers out of China to some other country? Maybe I can't even do that and what do I do? So you basically put everything on hold and said I'm not going to do anything. A good example of this is Brexit. It's effect on the UK where capital investment has collapsed because who knows what the future relationships of the UK is going to be with Europe and the rest of the world. So just put everything on hiatus until we know something. What's more likely to happen. So corporate performance has been flagging, corporate earnings has been flagging a bit. So at the corporate sector, which we think about it, if the hiring decision is based upon corporations, if they start seeing less, they're less optimistic about the future, they hire less. Individuals see less hiring. Wages may stop going up as much as they have. Not that they're booming, but they may go up even less than they have. And then people start saying, becoming a little more conservative about how they behave. They buy less, which feeds into a negative dynamic with the corporate sector, they see less demand. So they hire even less, which feeds back into employment and less confidence about the future. And they buy less than you get this vicious circle. That's how you get a recession sort of spiraling downwards and usually requires monetary policy or fiscal policy, something to break that link and stop it. That negative dynamic... but right now we don't see it. But the labor market is very, very key in addition to corporate performance.

With everything that is driving the markets, it may be hard to know what data points you need to pay attention to. 

Michael Kushma, CIO of Global Fixed Income at Morgan Stanley Investment Management, sat down with TheStreet to break down what economic data points investors need to pay attention to. 

Here's the data point he's paying attention to. 

"Well, one is also corporate performance. The weak link in the global economy is [Capital Expenditures]. And this was supposed to be a strength," said Kushma. "So after the big corporate tax reform, corporate tax cuts we saw in the U.S in 2018. And we saw a surge in after-tax earnings on many US companies. CapEx was picking up very sharply. And then the trade war began. And basically with all the uncertainty about the future, and where do I invest, what country do I invest in? Do I have to move my suppliers out of China to some other country?" 

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