
The CIO's View and the 2019 Macroeconomic Outlook

Not over until it's over
We expect global markets to be bumpy in 2019 as the US enjoys the last vestiges of fiscal stimulus but risks to the downside increase in the form of tighter monetary policy and tariff headwinds.
Whilst we head into next year favouring the US, investors could potentially benefit from assuming a more defensive posture as late-cycle risks mount. Additionally, investors should be prepared to reposition to other regions as opportunities shift.
Key takeaways:
- US expected to outperform
- Politics could dampen sentiment in Europe
- Emerging markets still providing opportunities
- China likely to play a large role in 2019

Global growth slows, with trade wars the biggest risk
Trade policy is the single most important source of uncertainty and may act as a deterrent to both the capex wave already under way and to consumer spending.
Risks are skewed to the downside in emerging markets amid the escalating trade spat between the US and China and potential missteps in that globally critical relationship.
Key takeaways:
- Global growth will continue to slow in 2019
- We expect synchronized monetary tightening in most advanced economies
- Inflation is likely to remain contained
- The United States will continue to stand out with ongoing fiscal stimulus
- Trade remains the biggest downside risk
What to watch in 2019 (Video - 02:41)
After a year of trade wars, rate rises and more volatile markets, we see three big themes for equity markets over the next 12 months. Watch this video to hear from Rick Lacaille, Global Chief Investment Officer.