Investing in the twilight zone
The economic expansion of the last decade has been a consistent tailwind for financial assets. We see next year as the start of the twilight zone between expansion and an eventual downturn that will likely mark the end of the cycle.
2019 should see a slowdown in global growth, a rise in core inflation in developed countries and further rate hikes from the Federal Reserve.
Twilight does not mean that darkness is descending immediately, but it’s characterised by fading visibility as previously clear signposts melt into obscurity. Concerns about the fragility of financial markets will inevitably increase as the ‘light’ starts to fade.