Global growth has chugged along at a modest pace throughout 2017, and I expect more of the same heading into 2018. Read on for a visual snapshot of our key themes across the globe.
With limited evidence of excess in the global financial system and mostly low interest rates around the world, we remain optimistic about global economic prospects. The expansion is poised to continue, led by growth in emerging economies.
Current estimates show a significant gap between the rate expectations of Wall Street economists and the Fed funds futures markets. The spread between their estimates for December 2019 is nearly 100 basis points, the equivalent of roughly four rate hikes. Over time, this gap in expectations is going to close one way or the other.
After a dip in global real economic growth last year, when a collapse in oil prices crushed the energy sector and related industries, I see global real GDP growth climbing to about 3.4% this year, leveling off through 2018.
“It is a Riddle, Wrapped in a Mystery, Inside an Enigma: but Perhaps There is a Key” - Winston Churchill
Investor confidence in the global outlook for monetary policy, economic growth and inflation has kept volatility contained. Can it continue? We think the risk of a destabilizing policy error is low if central banks remain cognizant of global financial conditions.
The election of President Donald Trump in November created uncertainty for alternative energy investors due to his anti-environmental, pro-coal stance. His election puts the main alternative energy policies in the United States, such as the Investment Tax Credit (ITC) for solar installations, Production Tax Credit (PTC) for wind installations and the Clean Power Plan (CPP), at risk. Recently, his anti-environmental stance was put in to action with an executive order to dismantle environmental protections.
A synchronized pickup in global economic activity has lifted the spirits of businesses, consumers and investors worldwide. Though many equity markets are near 52-week highs and credit spreads are near multi-year lows, corporate profits are now growing again in most countries.
“Not see the forest for the trees” is an idiom derived from British English that describes someone who is so focused on the minutiae that they miss the larger picture.
A synchronized pickup in global economic activity has lifted the spirits of businesses, consumers and investors worldwide. Though many equity markets are near 52-week highs and credit spreads are near multi-year lows, we still believe the US credit cycle has time to advance in its later stage.