Global Economy

Key points

• Despite continued volatility, 2019 is likely to be better for diversified investors than 2018 was.
• Watch the US trade war, the Fed, global business conditions indicators, Chinese growth, politics and the Sydney and Melbourne property markets as well as the upcoming Australian Election in May 2019.

...but there’s a few storm clouds around. Lets take a look at some key points:

• 2017-18 saw strong returns for diversified investors, but it was a story of two halves with strong December half returns but more volatility in the past 6 months.

What’s the risk and implications for other assets like shares & property?

• Rising global growth and rising commodity prices indicate the risks to inflation are gradually moving to the upside. This is most acute in the US with the Fed likely to raise rates more than the market expects this year.
• This supports the view that the 35-year super cycle decline in bond yields is over.

...a bit of turbulence hits markets. 3 reasons not to be fussed - following are some key points:

• Central banks beyond the US are edging towards an exit from easy money. This is likely to cause bouts of volatility in shares and a rising trend in bond yields.

...and turn down the worry list

We are going through one of those periods where it seems there is a long list of things for investors to worry about: the US election; the Fed; ever present fears about a break of the Eurozone; and China.

...Without the Bullshit

The Global Financial World has had a lot going on over recent years. Ever since the Global Financial Crisis, interest in the economic situation has peaked among the general public, although it is easy to get lost in the financial jargon.

The fear of fear itself or something more fundamental? Following are some key points:

• The malaise in financial markets is continuing with Australian shares now joining Europe, Japan and emerging markets in a bear market.