What to expect from 2019’s ‘post-peak’ economy

What to expect from 2019’s ‘post-peak’ economy

Originally published to CNN Business | December 9, 2018

Twelve months ago, investors were giddy.Markets were buoyant, supported by synchronous global growth and market-friendly US policies, including freshly minted corporate tax cuts and deregulation.What a difference a year makes. As 2018 draws to a close, investors are unsettled, volatility is spiking and most portfolios are in the red. Large setbacks in global equity and emerging markets, coupled with lackluster performance from bonds, credit and most hedge funds, have left investors unhappy this holiday season.

In 2019, the market environment is likely to remain challenging as growth slows and returns on capital struggle to meet still-lofty expectations.

Households, on the other hand, may fare somewhat better, as their share of the pie grows, courtesy of moderate wage increases. But even so, those gains are likely to be incremental and gradual. Global economic fundamentals explain why.

At first glance, the world economy looks to be in pretty good shape. Not since the 1980s have as many advanced and emerging economies enjoyed a simultaneous expansion like the one now underway. Today, those countries in recession or worse are few in number and small as a percentage of world output (e.g., Venezuela or Argentina).

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Stocks Aren’t as Pricey as This Ratio Suggests

Stocks Aren’t as Pricey as This Ratio Suggests

Originally published on Bloomberg.com | May 11, 2017 In the 1962 thriller “Cape Fear,” an ex-convict, Max Cady, stalks the prosecutor who put him behind bars, seeking revenge. The film reaches its nerve-wracking climax on the shores of Cape Fear. In the nick of time, evil is thwarted and justice prevails. Today, many equity investors… Continue Reading

Should Fed’s Policies Rule the World?

Should Fed’s Policies Rule the World?

Originally published at Bloomberg | July 14, 2013 Up to 60 percent of global transactions are conducted in U.S. dollars, more than one-third of world economic output is produced in dollar bloc economies, and an even greater share of global assets are priced in the currency, or linked currencies. This role as the de facto… Continue Reading