Outlook 2019: Are the dog days over? Thirteen market observations for what could be bounce-back 2019
One of my favourite guitar licks is the opening twenty seconds of Long Cool Woman by the Hollies. It’s truly magical. Unfortunately, I find the rest of the song to be a letdown.
2018 was a Long Cool Woman year. In January, the world economy was growing in harmony. We were coming off a year when stocks were up and volatility was non-existent. Credit was plentiful, Bitcoin was the future, a new cannabis industry was emerging and generally, investors were gaining confidence. But like the song, it was all downhill from there.
As we launch into 2019, we’re at the other end of the spectrum. Markets are gyrating again and mostly in a downward direction. Debt markets are nervous, with default premiums widening and fewer bidders at the table. And investors’ willingness to speculate has diminished. To use Warren Buffett’s measure, we moved from greed to fear.