Please note: this article is more than one year old. The views of our CIO team may have changed since it was published, and the data on which it was based may have been revised. Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect.
As we start 2019, we are looking down from one investment landscape (in terms of macroeconomic, policy and corporate environments) to a markedly different one. Over the last few years, we have seen many “peaks” – peak liquidity and then, probably, peak growth in GDP and corporate earnings in 2018. By contrast, prolonged market volatility in the closing weeks of last year suggests that 2019 will be more uncertain as markets struggle to reassess the new investment reality, given a range of apparently intractable geopolitical risks, most obviously U.S./China trade relations.
But, looking through the market noise, I think that it is possible to identify a number of themes that will run through the coming year. This year we have chosen six themes, based around the macroeconomic outlook, market conditions and the major asset classes. They can be summarised as follows: