Equities will be the main source of profitability during 2019

  • Imantia argues that emerging and European stock markets should have a more prominent role than the North American.
  • “We are in an advanced phase of the cycle, not in a recessive environment, we will see expansion but at lower rates than this year and accompanied by volatility.”
  • “We do not believe that this commercial war will take place at a global level, but a commercial negotiation with implications on the global cycle between China and the US.”

By Funds Society, Madrid
Equities will be the most outstanding source of profitability during the current year with returns of around 8%. This is what Imantia Capital affirms through its Outlook 2019, in which it states that emerging and European stock markets should have a more important role than the North American one. Regarding fixed income, from Imantia they point out that 2019 is a year of transition. They also highlight the various opportunities in more global assets and ensure that interest rates will continue with the upward trend that began last year.

Imantia also foresees a slight economic expansion. “We are in an advanced stage of the cycle, not in a recessive environment, we will see expansion but at lower rates than this year and accompanied by volatility,” the report reads. Another relevant point that Imantia echoes is related to central banks, which would continue to withdraw monetary stimuli.

Future of the USA and China

The Imantia report warns of a noticeable slowdown in the Chinese economy, which would directly affect its trading partners, especially Asians and Europeans. The entity attributes this circumstance, mainly, to the negative trend of global growth and to the intense commercial war that the Asian giant has with the United States.

Regarding the situation in North America, the report highlights that the US market has already collected the expectations of a Feferal Reserve that would continue to raise rates moderately. The entity warns that the challenge of the Federal Reserve will be “not make the mistake of continuing to raise rates and that growth does not accompany, or fall short and that the economy overheats.”

On the US-China relations, from Imantia they consider an understanding on the part of these two powers feasible. “We do not believe that this commercial war will take place globally, but a commercial negotiation with implications on the global cycle between China and the US We expect a progressive advance in the agreements that does not question the path of Chinese growth in particular and the overall cycle in general.”

Source: https://www.fundssociety.com/es/noticias/mercados/la-renta-variable-sera-la-principal-fuente-de-rentabilidad-durante-2019