The road ahead for risk assets looks pretty smooth right now. But valuations have already baked in a fairly rosy macroeconomic outlook. Markets are anticipating a rebound in growth and continued economic expansion. Is that what we will get?
We anticipate stable global growth, moderate to low inflation pressure and accommodative monetary policy across most regions. That said, an uptick in global economic indicators, like manufacturing PMIs,1 would go a long way to buoy investor sentiment and risk asset valuations. Without an upswing in economic activity, the outlook for global corporate profits could face further downgrade risks this year and into 2020.
For now, US recession and end-of-cycle fears look overstated. We believe the expansion should continue into next year.
Find those details and more in the April Investment Outlook.