Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892
Although equities, overseas and at home, have been recovering from their sell-offs in October, they are still well below their previous peaks. Looking ahead, the global economy looks like continuing its already long post-GFC expansion into 2019, which should be supportive for growth assets, but equities remain overdependent on the performance of American shares and the American economy, and there are risks (notably around trade wars and potential mistakes from accidentally overtightening monetary policy) which could derail the outlook.
In Australia, the RBA has come out with a notably more upbeat forecast for business activity, but there is still a wide range of other views, and even on the bank’s upbeat take, the 2019 economy may not translate into strong corporate profit outcomes.
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