Raymond James’ 10 Themes for 2019
By: Cameron Diehl, CFP®
Friends – We’re well into the new year and one of my resolutions is keep these articles succinct. So without further ado, I wanted to share some highlights from Raymond James’ “10 Themes for 2019” from our excellent new Chief Investment Officer Larry Adam.
Given recent volatility as well as the length of the current bull market, many investors are seeking second opinions in regard to their investments. The points below provide a great framework to guide conversations in 2019.
- Economy: With little sign of recession, the U.S. economy should mark its longest expansion on record in July and continue to grow at an (albeit slower) above-trend pace.
- Fed Policy: The Fed should remain “data-dependent” and flexible as inflation is contained and growth challenges mount.
- Increased Volatility: The low probability of a recession should provide opportunities for risk asset investors and more chances for active managers to outperform.
- Bond Market: With upward pressure on interest rates, bonds could become incrementally more attractive; cash is now a viable alternative.
- Equities: U.S. corporate earnings should move higher on the back of modest economic growth, solid corporate confidence, and buybacks.
- Sector Selection: Larry and his team continue to favor cyclical sectors – particularly technology, energy, industrials and healthcare.
- International: While attractively valued, developed international markets may continue to struggle amid political drama; Larry and his team favor emerging markets, particularly in Asia.
- U.S. Dollar: A less aggressive Fed, less upside surprise potential of the U.S. economy, and the fading of some European political risks favor a more stable euro.
- Oil: The recent pullback in oil prices should begin to reduce output leading to undersupply; Larry and his team expect oil to rally to $62 per barrel by year end.
- Technology: The recent pullback provides an attractive entry point into a sector that continues to grow its earnings and expand its “disruptive” forces to almost every sector of the economy.
If you’d like to discuss how these themes relate to your personal planning or would like to see a full version of Larry’s commentary, let’s connect. I’m happy to help.
