Key potential catalysts for emerging markets performance in 2019 are US dollar weakness, a better-than-expected outcome in US-China trade relations and an easing in Chinese growth concerns.
We believe that US earnings growth will slow in 2019, but we think the more challenging corporate environment may provide a rich backdrop for stockpickers.
Valuations have become more attractive and fundamentals are reasonably positive. But a period of transition looms, with central bank support being withdrawn and government bonds now offering a more compelling alternative than they have in many years.
We look across the range of commodities and find that supply and demand dynamics should mean elevated anxiety levels can be overcome and drive positive returns in 2019.
The next few years will see rising physical losses from climate-related events, higher taxes to combat intergenerational inequality and tougher conditions for over-levered corporates.