Both equities and bonds have continued to do well this year. Although U.S. - China trade tensions have weighed on equities in recent days, investors in both local and global equities are still well ahead for the year to date, while investors in domestic and international bonds have also benefited from the capital gains created by largely unexpected falls in bond yields...
For now, the global economy is still likely to keep growing at a modest pace...
It has been a good year for investors thus far, as unexpectedly lower bond yields have not only generated gains for fixed-interest investors but have also improved the perceived attractiveness of many other asset classes. It has helped that late-2018 nervousness about global growth has continued to dissipate...
Equities have continued to recover from their sell-off late last year...
Many asset classes have done well for the year to date. Income-oriented asset classes like property (local and global) and infrastructure have been in strong demand; and bonds are also ahead for the year as bond yields have fallen. Looking ahead, the most likely scenario is that the world economy will ‘muddle through’ with ongoing economic growth, though the likely pace of business activity now looks slower than previously expected...
Equity prices have had a good start to the year, though the price gains have yet to recover all the ground lost in the global sell-off late last year...
Growth assets have recovered since their low point just before last Christmas, though they have not regained all the ground lost in the final quarter of last year.
Looking ahead, although the outlook for global growth has been marked down a bit, 2019 still looks like another year of global economic expansion. But it could easily be derailed, particularly by any acrimonious trade wars between China and the US or by other risks such as credit market disruptions. The outlook at the moment is consequently hard to call, with some chance of smooth sailing but also a good chance of markets hitting a sharp reef....