Market volatility and other trends will be decisive for investments

The financial markets during 2018 were very vertiginous, reason why the experts in this area have prepared a series of recommendations for those who wish to enter in said business.

It is expected that by 2019 there will be a slowdown in global economic growth of 2.3% in the United States, 1.4% in Europe and, the highest, 6.1% in Asia.

The investment expert at Tressis assures that this is a great opportunity for investors, because the phenomenon should be seen as a “mild deceleration” instead of a recession.

For its part, the founder and director of the School of Trading and Forex Eduardo Bolinches ensures that the only insurance for this year is that “the market will be volatile as large events such as the Brexit or the commercial war between United States and China”.

In case there is no agreement for March 1st of this year, the tariffs valued at 200,000 million dollars that the United States demands from products coming from China, will go from 10% to 25%.

Macroeconomic risks will be an important trend during 2019

The most important reality for this year is the Brexit. Although there were important advances during 2018 the resignation of several members in charge of the negotiations caused to create fears about “a Brexit without agreement that can do a lot of damage to the markets”.

According to Victoria Torre, an analyst at Self Bank, the uncertainty regarding the exit of the United Kingdom from the European Union “may be that the revisions on the economic growth in Europe begin to happen”.

Torre also assures that another factor to highlight is the situation in Italy, which “to this day does not give its arm to twist and puts them in a very delicate situation”.

Despite the cryptocurrency phenomenon, central banks will maintain the leading role

The most important banks in the world will maintain their leading role in the world economy, or at least so thinks the global strategist and Allianz economist, Ann-Katrin Petersen, who assured that the institutions will continue to normalize their monetary policies.

The expert also highlighted the situation with the highest interest rates in the United States and the “end of the quantitative easing of the European Central Bank“, a move that will reduce current liquidity and create a more mobile market by 2019.

Despite all this, a slightly more complicated year is expected due to the fact that the inflation index did not reach the forecasts made by the ECB.

United States and Wall Street: the volatility guides for this year

In the last two years, movements in markets such as Wall Street were so hectic that the same and even larger scale is expected for 2019, as indicated by Christopher Gannatti, director of analysis at Wisdom Tree.

The analyst says that for this year “the US economy will not grow at the rate of 4.2% achieved in mid-2018 and it is unlikely that the S & P 500 will continue increasing its annual profits of 20%.

Although this trend would point to an economic recession, the US markets can continue showing a point of inflection and deceleration, and continue with their growth.

GDP growth in China and other factors will affect the economy of Asia

According to the experts, China’s GDP growth will slow down to 6.1% by 2019, the main consequence of this being the macroeconomic impact of US tariffs.

The firm AXA IM considers “probable that this is mitigated in some way by a greater flexibility of the policies with a bias towards the fiscal, instead of monetary”.

In Japan, however, the story is different. Government stability should allow the economic and social transformation of the region to be completed, as Michaël Lok, Co-CEO Asset Management & CIO Group of UBP, assures.

However, the aging of the population, added to the loss of public investment, will be a determining factor so that the potential growth of the nation can barely exceed 1%.

The emerging markets of the world will recover

The constant increase in interest, and the crisis that exists in Turkey and Argentina, represented a hard blow for emerging markets during 2018.

In spite of all this, the analysts of the Deutsche Bank of Germany foresee that “the economic fundamentals will maintain in high levels the rates of economic growth of the emergent countries. It is expected that in 2019 the growth will be at 5%.

2019 aims to be a year of changes and growth for the world economy. Not only the States but also the modern economy (cryptocurrencies and fintech) can evolve to become what many experts in the area expect them to be.

K. Tovar

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