Shifting sands
By
👤BNY
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Inflation, trade wars and euro debt are among the potential headwinds for the world’s economy in 2019, but that doesn’t mean the overall global picture is necessarily a negative one. If 2017 was the year of synchronized global growth, 2018 was the year the global environment diverged as the U.S. powered ahead while the rest of the world stumbled. Ten years into a record-length recovery and attendant bull market in the U.S., the divergence between the strong U.S. economy and the rest of the world, along with a determined Federal Reserve (Fed), ultimately roiled global equity markets from Beijing to London to New York. Looking ahead, tighter financial conditions, a downtick in European growth, some idiosyncratic emerging market stumbles, the deleterious worldwide effects of a stronger U.S. dollar, and trade tensions all threaten to spill over into 2019. The question facing investors as they focus on allocations in 2019 is whether fundamentals are strong enough to steady global markets and whether current asset prices sufficiently discount solid, though weaker, fundamentals and risks to the global outlook.
By
👤BNY
