The bear that has been in hibernation for the past 10 years awoke in 2018, as 90% of all global asset classes delivered negative returns over the past 12 months. In our 2019 Outlook, the link below, we outline how market fundamentals evolved over the past year, why we believe the bear isn’t finished yet, and our playbook for finding great value in this environment. You won’t find any mention of ‘trade wars’ throughout our note – we focus more on the current business cycle and fundamentals. Clearly headlines will move markets up & down, but we would caution on reading too much into these swings.
Our current outlook doesn’t incorporate much trade impact; however, we understand that a full escalation after the stated 90-day window with China would put material cost pressure on most companies. In the short term this could deepen our bear case, but we wouldn’t expect a material effect over the long term. Please feel free to reach out with any questions – enjoy!
2019 Focal Points: pricing power, EBIT margins, emerging markets, US housing.
