Market Outlook

As we turn the page to 2018, there are a few obvious clouds on the horizon for the world economy; however, we expect 2018 to be a transition year. Stretched valuations and extremely low volatility imply that risk assets are vulnerable to the consensus macro view that central banks will not be able to reach their inflation targets, even in the long term. The quarter’s Outlook includes a detailed analysis of:

U.S equities: While due for a correction, we don’t expect the S&P 500 will slide into bear territory in 2019
Global emerging markets: Why we believe they will continue to outperform in 2018, but will be challenged over time by China’s changing growth strategy
Japan and the Eurozone: Why expect developed international equities will once again outperform U.S. equities
Macro risk outlook: Geopolitical risks for the year ahead, particularly the risk of increased foreign policy adventurism (and why we are keenly monitoring the recent ratcheting up of tensions in Iran)

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