Carmignac's Note

In this slow-growth phase, stock price dispersion could strongly influence portfolio returns, contrary to what happened in 2018

The upside of this slow-growth phase is that stock price dispersion could heavily influence portfolio returns, contrary to 2018

As we enter 2019, the underlying issues still haven’t been addressed. The global economic slowdown has become synchronised, and monetary policy has tightened

The end of a given monetary policy stimulus unavoidably raises the cost of risk, thereby reducing price/earnings ratios

The key question is whether protectionism will actually prove beneficial to the US economy. Chances are it won’t.

A simultaneous end to three cycles – monetary, business and political – still constitutes the primary problem facing financial markets

What most threatens to upend financial markets at this point are the concurrent monetary, economic and political shifts taking place.

The “conventional” signals of an upcoming cyclical slowdown are now visible in financial markets. After a decade of market distortion cause by central bank policy, financial markets will be put to the test once cyclical support fades away; the countdown is on.

The current market instability reflects investor confusion about the transitional period between two sharply contrasting liquidity paradigms.