Growth Slowing, but Precipitous Drop Unlikely

Although the current economic expansion is aging (bringing us nearer to a recession) leading indicators do not indicate a sharp contraction. What does that mean for equity investors? Director of Research Carmel Wellso explains.

Key Takeaways

  • So far, leading indicators suggest the global economy is slowing but not at risk of a precipitous drop (barring a sharp deterioration in trade wars or other exogenous shock).
  • In fact, although earnings expectations have eased, major stock indices are still expected to average at least single-digit growth rates in 2019.
  • As such, we think investors should consider reducing risk exposure and pivot to companies that tend to deliver consistent earnings.