What to expect from 2019’s ‘post-peak’ economy

by | December 9, 2018

Originally published to CNN Business | December 9, 2018

Twelve months ago, investors were giddy.Markets were buoyant, supported by synchronous global growth and market-friendly US policies, including freshly minted corporate tax cuts and deregulation.What a difference a year makes. As 2018 draws to a close, investors are unsettled, volatility is spiking and most portfolios are in the red. Large setbacks in global equity and emerging markets, coupled with lackluster performance from bonds, credit and most hedge funds, have left investors unhappy this holiday season.

In 2019, the market environment is likely to remain challenging as growth slows and returns on capital struggle to meet still-lofty expectations.

Households, on the other hand, may fare somewhat better, as their share of the pie grows, courtesy of moderate wage increases. But even so, those gains are likely to be incremental and gradual. Global economic fundamentals explain why.

At first glance, the world economy looks to be in pretty good shape. Not since the 1980s have as many advanced and emerging economies enjoyed a simultaneous expansion like the one now underway. Today, those countries in recession or worse are few in number and small as a percentage of world output (e.g., Venezuela or Argentina).

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Filed Under: Economics

About the Author

Alex Friedman is the co-founder of Jackson Hole Economics, LLC, a private research organization which provides analysis on economics, politics, the environment and finance, and develops actionable ideas for how sustainable growth can be achieved. Friedman is a senior leader with two decades of experience growing and transforming organizations in the financial and non-profit industry. He was the CEO of GAM Investments in London and chairman of the firm’s executive board. Previously, he was the Global Chief Investment Officer of UBS Wealth Management in Zurich, chairman of the UBS global investment committee, and a member of the executive board of the private bank. Before moving to UBS, Alex Friedman served as the Chief Financial Officer of the Bill & Melinda Gates Foundation. He was a member of the foundation’s management committee, oversaw strategic planning, and managed a range of the day-to-day operating functions of the world’s largest philanthropic organization. Friedman also created the foundation’s program-related investments group, the largest impact investing philanthropic fund in the world. He started his career in corporate finance at Lazard. Friedman served as a White House Fellow in the Clinton administration and as an assistant to the U.S. Secretary of Defense. He is a member of the board of directors of Franklin Resources, Inc. (Franklin Templeton), a member of the Council on Foreign Relations, Chairman of the Advisory Board of Project Syndicate and a board member of the American Alpine Club. Friedman is a regular contributor to a range of newspapers and thought leadership groups and is also the author of Babu’s Bindi, and The Big Thing, both children’s books. He is an avid mountaineer and rock climber and led the first major climb to raise money for charity through an ascent of Mt. McKinley. Friedman holds a JD from Columbia Law School, where he was a Harlan Fiske Stone Scholar, an MBA from Columbia Business School, and a BA from Princeton University.

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