MARKET OUTLOOK

2019 Outlook: Building resilience

Our implementation ideas for the key themes in 2019

ETF and Index Investment Strategy
Jan 2019

Key Points

  • Theme 1: Growth slowdown. We see a slowdown in global growth and corporate earnings in 2019, with the US economy entering a late-cycle phase. This calls for a quality tilt in portfolios.
  • Theme 2: Nearing neutral. Tightening financial conditions have pressured valuations in 2018. A pause in the Federal Reserve’s tightening cycle could provide some relief in 2019, but we look to hedge against rate uncertainty.
  • Theme 3: Balancing risk and reward. Rising volatility and late-cycle market conditions call for a focus on portfolio resilience. But it’s about more than just defence – selective risk exposure is important for meeting long-term goals.

This 2019 Outlook is an iShares companion guide to the Global Investment Outlook 2019 published by the BlackRock Investment Institute.

We expect global economic growth to slow in 2019. We see the US entering a late-cycle phase and US GDP growth stabilising – albeit at a much higher level than other regions, even as the impact of fiscal stimulus fades. Eurozone growth remains subdued and our BlackRock Growth GPS continues to show room for downside surprises. Growth remains tepid in Japan. Fiscal and monetary stimulus should be supportive for the Chinese economy, yet we expect a mild slowdown as the country focuses on the quality and sustainability of its growth.

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This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy.