Capital Group explores how investors should navigate a late-cycle global economy marked by rising volatility, tightening policy, and diverging growth trends. The paper suggests uncertainty may persist even with ~3.7% global growth, while emphasizing that late-cycle conditions do not necessarily signal an imminent downturn.
Outlook 2019
Capital Group
Research
16 Pages
Key Takeaways
Late Cycle Indicators Rising: U.S. unemployment hit a 49-year low while wage growth and inflation pressures increased, signaling a mature expansion phase with tightening monetary policy.
Global Growth Diverging: IMF forecasts ~3.7% global GDP growth for 2019, but China and Europe show slowing momentum versus relatively stronger U.S. economic performance.
Fixed Income Repricing Opportunity: Rising rates are lifting bond yields from historic lows, improving income potential after years of near-zero returns in core fixed income markets.
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