Politically, financially and economically, 2018 was a volatile year with a US-China trade conflict, a difficult Brexit negotiation in Europe, and oil supply concerns in some OPEC countries.
Investors prefer predictable waters and it remains to be seen whether 2019 will provide any sort of relief following last year’s roller-coaster ride.
To help steer investments, below are several predictions for 2019 as reported by Bloomberg:
- Global economic growth will weaken before slowing down and finally stabilizing in major economies (1.4 percent in Europe and Japan) and emerging markets (6.4 percent).
- Many global entities will hire and invest less in response to the uncertainties created by Trump's various conflicts with US trading nations and in Washington itself.
- The US-China trade dispute will, unfortunately, continue in the first quarter of 2019.
- China is stabilizing its economy by combining fiscal and monetary stimulus in order to adjust itself to a slower growth rate.
- The longer the US-China trade dispute lasts, the more disrupted global supply chains will become and the more contagious its effects will be.
- A potential US recession, in addition to an overvalued US dollar, may take place in 2020 with a tougher US-China trade conflict in the second half of 2019.
- The race for technological supremacy between the US and China will continue with Huawei taking over Apple as the world's second largest smartphone seller, right behind Samsung.
- For the last fifteen years, the financial world has been waiting for the next Japanese debt crisis and, will continue to do so in 2019.
- Brexit will hardly affect the global economy due to the UK's relatively small economic output. The UK economy, however, may fall into recession because of a "hard Brexit" or "no deal" outcome.
- Oil prices will recover in 2019 with Saudi Arabia likely covering any drop in Iran's production.
- Views on commodities and cash will likely be bullish with Brent oil hitting a USD 75- 85 per barrel range and gold rising to USD 1,300 per ounce.
- The US dollar, global equities, and US bonds markets will be bearish and potentially volatile.
- Gene therapies and other innovative treatments will mainly drive the healthcare industry.
- In 2019, cash will lead all asset classes, as it usually does during uncertain times.
In a year's time, we shall see whether these financial wizards' scenarios bear sweet or sour fruits.
In the meantime, best of luck for 2019!
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