Year-end turbulences heralding difficult 2019?
Happy New Year from team Cambridge and here’s to a more joyful 2019 for investors! As our 2018 table of asset class returns below shows, 2018 brought even less joy for investors worldwide than we had expected. The only consolation is that it came after two very pleasing years of investment return and did not reflect a similar downward development across the global economy.
Britain in 2019: What the economists say
Economists’ expectations for Britain in 2019 are in, and they don’t look good. This week, a survey conducted by the Financial Times of leading economists showed they expect Brexit uncertainties to cripple business investment and consumer sentiment over the next year. Wage growth, productivity and all the usual growth engines are therefore likely to be subdued.
End of year stock market rollercoaster & other 2018 trading anomalies
Investors expecting ‘Silent Night’ in markets over Christmas will have got quite a shock. On Christmas Eve, the S&P 500 fell -2.7%, the largest Christmas Eve fall in US stock market history. Perhaps even more surprising, when trading resumed on Boxing Day the index rose 5%, the largest rebound since March 2009. It seems that while everyone else curled up by the fire, US traders frantically rushed to get in last minute trade before the year end.
China’s short-term pain for long-term gain
2019 will bring “opportunities and challenges” for China, according to President Xi Jinping. In a new year’s address broadcast on all major state media, the President reaffirmed China’s commitment to reform – as the country marks its 40th year since reform began. Without mentioning the trade war with the US or China’s ongoing economic slowdown explicitly, he promised that “the door to opening up will widen further.”
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