Entering 2019 we expected both global growth and corporate profit growth to slow moderately in 2019, but we did not forecast a recession. Uncertainty around monetary policy, interest rates, trade, and inflation highlighted the need for diversification in portfolios, but we believed equity markets to be undervalued and positive fundamentals to be overlooked. Equity markets have since sharply recovered, and our outlook remains positive.
- We still do not forecast a recession in the near future – As expected, the economy is growing more slowly but remains on firm footing.
- The data for employment, inflation, and GDP growth suggest continued expansion.
- We remain optimistic regarding equities over the next 6-12 months, but there is potential for the current equity rally to experience some fatigue through the end of 1H 2019.
- We do not believe the Federal Reserve will cut interest rates before the end of the year and are still positioned for a slowly rising interest rate environment.
As always, we urge clients to keep a long-term mindset and believe that exposure to risk assets is important for meeting long-term goals, especially given that we still maintain a positive outlook for stocks.
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Index Descriptions: “Large Cap Equities” S&P 500, “Small Cap Equities” Russell 2000, “Int’l Developed Equities” MSCI EAFE, “Emerging Market Equities” MSCI EM, “Commodities” Bloomberg Commodity index, “US Aggregate” Bloomberg Barclays US Aggregate, “US High Yield” Bloomberg Barclays US Corporate High Yield, “Emerging Market Debt” Bloomberg Barclays Emerging Market Debt Index, “REITS” NAREIT All Equity REIT Index, “MLPs” Alerian MLP Index, “Balanced Portfolio” 30% S&P 500, 10% Russell 2000, 15% MSCI EAFE, 5% MSCI EM, 40% Bloomberg Barclay Aggregate
Source: Bloomberg, HighTower Advisors.
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This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.
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This document was created for informational purposes only; the opinions expressed are solely those of Synergy Capital Solutions and do not represent those of HighTower Advisors, LLC, or any of its affiliates.