2019 could be the Year of the Answer for global equities markets. Well, if not clear-cut answers then at least some clarity on key questions confounding bulls and bears.
Four questions stand out; two global, two local. The biggest is the pace of United States interest-rate rises. Having assumed rate rises would continue into 2019, the market is pricing in fewer (or even no) rate rises. That implies the US economy is poised to slow next year, a risk reflected in lower-than-expected job figures in December.
The second question is the US/China trade war. Witness this month’s volatility in global equities when investors panicked that the US/China trade truce would be short-lived. An escalating trade war will weigh on global growth and on China, which is bad news for Australia.