Barometer: Happy new year?

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The global economy is cooling. Concerns about a full-blown trade war between the US and China have led to a significant deterioration in business confidence and economic activity, particularly in the developed world. It's not all doom and gloom, though. Central banks are once again taking action to support growth. The US Federal Reserve has signalled a halt to rate increases; it might also slow the pace of sales in its bond portfolio. What is more, China has implemented monetary stimulus on top of fiscal measures to stabilise economic growth. Together, the actions of the world’s most powerful central banks should help calm investor nerves following the market rout at the end of 2018. Still, central bank action cannot completely eliminate investment risks: tensions between the US and China will linger for some time to come. Taking all this into account, we have decided to maintain a neutral stance on equities and bonds.