2019 mid-year market outlook update: Investors on edge
WEEKLY MARKET COMMENTARY |
Global growth slowed over the last six months. In April, the International Monetary Fund forecast for world real gross domestic product (GDP) growth in 2019 of 3.3% was down 0.3% from 2018. Some slowdown in the U.S. was expected as benefits of tax-driven fiscal policy diminished; however, slumping exports and lower investment in emerging market economies contributed to the slowdown as well.
Since GDP data is reported with a lag, and often subject to revisions, we monitor global Purchasing Managers' Index® data, revealing additional weakness in business activity across the globe. Given the modest, but expansionary level of business activity through June, we expect corporate earnings results and management guidance to play a more prevalent role in the second half of the year.
In response, the Federal Reserve and other central banks ended gradual and anticipated tightening of monetary policy. Central banks stand ready to deploy accommodative policy to support slowing growth.