For several quarters we have been highlighting the manual for fisher rem-9625 secular trend by consumers away from Things and towards Experiences think posting a delicious meal on Instagram versus adding another sweater to the wardrobe.
The key to how slow things get economically, we believe, is whether confidence begins to wane in 2019, which could dent both consumer spending (most important) and capital expenditures.
This viewpoint represents a change in our thinking, but as we show below in Exhibit 109, a lot of damage has been done.In fact, the fourth quarter of 2018 was the worst performance for.S.The information in this document, including statements concerning financial market trends, is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons.We also think that wording around its balance sheet withdrawal being on autopilot could be amended even further in 2019 to provide the central bank with more near-term flexibility than we previously thought.No representation or warranty, express or implied, is made or given by or on behalf of KKR,.Importantly, though, as we describe below in more detail, we believe that our Complexity thesis is on the cusp of shifting from Corporate Complexity to Capital Structure Complexity over the next few years (Exhibit 21).
Regardless of whether one is bullish or bearish on a cyclical basis, our longer-term message is that CIOs need to reassess their portfolios for the macro environment we envision during the next five- to seven-years (see Rethinking Asset Allocation ; November 2018).
(and well above yields available in Europe and Japan an investor is also paying for some capital gains if the Fed does pause because of trade concerns, growth jitters, and/or geopolitical tensions.
Our Forecast for Headline Inflation in Europe Remains Muted for 2019 Data as at December 31, 2018.
As the Consensus Has Come to Appreciate that the Market Will Be More than Adequately Supplied with Crude in 2019 Data as at December 31, 2018.
In terms of sectors and themes we favor, we encourage investors to lean into Healthcare, Energy Infrastructure, Asian Technology (public markets and parts of Industrials (some of which are over-discounting a recession).
Whats changed in our minds?
Where to go in corporate credit?In our view, this shift in focus by the Authorities towards more fiscal policy help and less monetary policy stimulus is a secular, not a cyclical one.With usdjpy volatility and skew trading at a high premium, we believe expressing this trade through a long 6 month atmf (110) / 20 Delta (105) Put Spread for a total cost.20 realizing a return.9x (assuming spot expires at 105).Leggate says Devon's most recent earnings report was reassuring to investors, and the company is well-positioned to improve its capital efficiency in 2019.Local and Regional Competitors Are Increasingly Challenging the Returns of the Multinational Firms Data as at January 31, 2017.To accelerate further in 2019.And other Western powers are locked in an increasingly structural geopolitical struggle with China that does not lend itself to easy resolutions or half measures and 3) populist trends will continue to contribute globally towards a resurgence in nationalist tendencies.GDP Momentum in the United States Data as at December 31, 2018.As we travel around the globe, particularly in Asia (where there are more than 800 million millennials; Exhibit 113 we see that technology has made the movement towards Experiences Over Things a secular trend with far ranging implications in major sectors such as Healthcare/Wellness, Leisure.Technology Has Been the Key to EPS Growth This Cycle Data as at November 26, 2018.Like in the.S., these forces often intersect with more assertive and less conventional leaders like Donald Trump, Xi Jinping, and amlo (and in some cases also more authoritarian ones like Vladimir Putin and Viktor Orban) that openly challenge international norms, are more confrontational, and.