4 February 2019
What's new in the financial markets?
Chief Investment Officer ING Belgium
Thierry Masset, Chief Investment Officer reviews the economic and financial news. Every month, he analyses events that have impacted the financial markets. The context of any potential stock market fluctuations is equally scrutinized. You can find this market analysis and ING's investment strategy by consulting our "Monthly Market Review".
On the dark side of a late-bull market
- Bulls and bears are still squaring off over whether the economy and earnings have peaked, portending a halt to a nine-year surge that has added more than $46 trillion to the value of world equities.
- From U.S.-China trade tensions to uncertainty over Federal Reserve monetary policy and Brexit, issues that were at the center of the fourth-quarter equity rout haven’t gone away. Meanwhile, bad news keep creeping in. The list of companies in cutting financial forecasts is growing, reinforcing fears that a slowdown in 2019 profits may be worse than analysts anticipated.
- With risk assets now more sensitive to macroeconomic factors and political uncertainty playing an increasing role, volatility in market sentiment is here to stay and defensive assets should outperform.
The Chinese probe "Jade Bunny" on the dark side of the moon
“While China landed a lunar probe on the dark side of the moon, the first ever spacecraft to reach the surface that always faces away from Earth, financial markets are also on the dark side of one of the longest expansions on record as investors are attempting to adjust their portfolios in anticipation of a potential upcoming economic recession. The Federal Reserve Bank of New York gauge puts the chances of a U.S. recession at almost 20% a year from now. Even if is not yet worrisome, this is the highest reading since November 2008 and this is enough to generate higher volatility on risk assets.”