Invest
Six things for investors to watch for in 2019
Although 2019 has been picked as a year likely to deliver much better returns for diversified portfolios than the volatility of 2018, there are still a number of macro-factors investors should keep their eye on.
Six things for investors to watch for in 2019
Although 2019 has been picked as a year likely to deliver much better returns for diversified portfolios than the volatility of 2018, there are still a number of macro-factors investors should keep their eye on.
Shane Oliver, chief economist at AMP Capital, outlined six events investors should watch closely in 2019.
- US Federal Reserve movements and policy pause
Mr Oliver predicted that the volatility in markets and the subsequent threat to global growth will impact the movements of the world’s federal banks, with the US Federal Reserve forecast to pause.
“Our base case is that US inflation remains at 2 per cent, enabling the Fed to pause/go slower,” he explained.
He advised investors to observe US inflation closely, as an acceleration could result in increasing fiscal tightening, a sharp spike in bond yields and a stronger US dollar.
This would negatively impact emerging markets, which have been picked to outperform should conditions stay as predicted.
“US remains most at risk on the inflation front though, given its still tight labour market,” Mr Oliver said.
- Global growth
Although it is forecast that global growth will continue to weaken over the coming months, Mr Oliver said it was imperative stabilisation occurs in the next six months.
“It’s likely to stabilise and resynchronise as the year progresses, helped by policy stimulus, an easing in the US dollar, and, by the late 2018, plunge in energy costs,” he predicted.
- China growth
Mr Oliver has forecasted an injection of stimulus measures by the Chinese federal bank early in the year, as the economy continues to slow and the changes to trade take a toll.
“A continued slowing in China would be a major concern for global growth and commodity prices,” he warned.
- US-China trade war
Mr Oliver said it was important investors avoid being overly positive regarding the current negotiations between the US and China, as talks could easily dissolve and tensions rise again.
“While it may be on hold thanks to negotiations with China, Europe and Japan, these could go wrong and see a flare up again,” he cautioned.
“Tensions generally pose a significant risk for markets.”
- Politics
There exist a number of political risks across the globe that are likely to impact market movements over the coming year, Mr Oliver said.
In the US, the Mueller inquiry and the return to a divided government has been identified as a significant risk.
“[These factors] could lead to risks around raising the debt ceiling and Trump adopting more populist policies,” Mr Oliver explained.
“Expect volatility to remain high given this ongoing political risk and the lower level of spare capacity in the US.”
In Europe, Brexit, Italian debt and the EU parliamentary elections in May were picked as important macro-events for investors to watch closely this year, while in Australia, risks come from potential interventionist government policy and tax changes following the federal election.
- Australia’s property market downturn
Mr Oliver has encouraged investors to keep an eye on the current downturn impacting property markets across Australia, as non-mining investment, infrastructure spending and export earnings may not be enough to offset the drag from dwindling housing construction rates and poor consumer spending.
“Australian growth is expected to be sub-par, as the housing downturn detracts 1–1.5 percentage points or so off growth,” he stated.
Stock market
‘Skinny rally’ can’t continue: Bell
Bell Asset Management CIO Ned Bell believes that market darling large-cap companies are in for a reckoning as the global economy reopens for business. ...Read more
Stock market
Vaccine rollout to boost underperforming stock in 2021
The rollout of the COVID-19 vaccine is tipped to be a greater stimulus than the massive fiscal response, with shares that have underperformed during the pandemic set to soar in 2021, an industry exper...Read more
Stock market
US lawmakers quiz key GameStop players
Notorious retail investor Keith Gill is facing a grilling from the US congress and the possibility of a class action lawsuit due to his alleged part in the GameStop saga, with policymakers convinced h...Read more
Stock market
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for anothe...Read more
Stock market
Stock market bubble fears overblown: Vanguard
Fears of a stock market bubble are “overblown” despite equity markets around the world closing in on all-time highs, an industry analyst states. ...Read more
Stock market
Experts blast Treasurer’s plan to permanently ease disclosure laws
Sharemarket disclosure laws could be permanently relaxed as the Treasurer looks to shield businesses from disgruntled shareholders, but legal experts have labelled Frydenberg’s reasoning “madness...Read more
Stock market
Is your portfolio climate change ready?
The vast majority of investors believe climate change will have an impact on their portfolio, yet not all investors are readying their asset allocation to take advantage of a net zero world, new resea...Read more
Stock market
Sharemarket penalises mining firms abusing human rights
The sharemarket has been a powerful tool in holding to account mining companies engaged in human rights violations, but informational campaigns by civil society groups and the media are the real aware...Read more
Stock market
‘Skinny rally’ can’t continue: Bell
Bell Asset Management CIO Ned Bell believes that market darling large-cap companies are in for a reckoning as the global economy reopens for business. ...Read more
Stock market
Vaccine rollout to boost underperforming stock in 2021
The rollout of the COVID-19 vaccine is tipped to be a greater stimulus than the massive fiscal response, with shares that have underperformed during the pandemic set to soar in 2021, an industry exper...Read more
Stock market
US lawmakers quiz key GameStop players
Notorious retail investor Keith Gill is facing a grilling from the US congress and the possibility of a class action lawsuit due to his alleged part in the GameStop saga, with policymakers convinced h...Read more
Stock market
Facebook’s news ban feared to have implications for the sharemarket
Facebook’s move to restrict the sharing and viewing of news in Australia could have huge implications for the sharemarket, an expert has said, as Treasurer Josh Frydenberg readies himself for anothe...Read more
Stock market
Stock market bubble fears overblown: Vanguard
Fears of a stock market bubble are “overblown” despite equity markets around the world closing in on all-time highs, an industry analyst states. ...Read more
Stock market
Experts blast Treasurer’s plan to permanently ease disclosure laws
Sharemarket disclosure laws could be permanently relaxed as the Treasurer looks to shield businesses from disgruntled shareholders, but legal experts have labelled Frydenberg’s reasoning “madness...Read more
Stock market
Is your portfolio climate change ready?
The vast majority of investors believe climate change will have an impact on their portfolio, yet not all investors are readying their asset allocation to take advantage of a net zero world, new resea...Read more
Stock market
Sharemarket penalises mining firms abusing human rights
The sharemarket has been a powerful tool in holding to account mining companies engaged in human rights violations, but informational campaigns by civil society groups and the media are the real aware...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
