2 January 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".
2018 has been the hardest year to invest since the early 1970s
- 2018 started with hopes of strong and coordinated global growth. 2019 will not. Advanced economies are set to slow, with a divergence between the U.S. and the rest. Some Emerging Markets face recession – fallout from 2018 currency crises.
- Key uncertainties are the trajectory for Federal Reserve tightening and its impact on Emerging Markets, the intensity of U.S.-China trade wars, and the economics – and politics – of tighter conditions in the euro zone.
- The year ahead probably won’t bring the end of the cycle, but risks are growing and new sources of fuel are needed.
- As investors are progressively pricing in the fear of potential de-globalization, lower economic and profit growth and modest single-digit absolute stock return next year, the flight to quality will probably continue next year.
“If we put markets into five big asset classes — bonds, stocks, real estate, commodities and cash —, not a single one of them is on track to post a return of more than 3% in euro, a phenomenon last observed in 1972. That is all but unique in history. Normally when something falls, something else gains. Amid the financial catastrophe of 2008, Treasuries rallied. In 1974, commodities were a bright spot. In 2002, it was real estate. In 2018, there was nearly nowhere to run and to protect against evaporating central bank stimulus.”