What 2018 has in store for the markets

WHAT is in store for economies and markets in 2018?

Around this time of year, a large number of analysts and fund managers are giving their views. Among the most interesting and thoughtful approaches can be found at Absolute Strategy Research (ASR), an independent group founded by David Bowers and Ian Harnett.There are some disconnects within the consensus view. The first is that investors expect volatility (as measured by the Vix) to rise next year. Usually, equities struggle in such circumstances. The second disconnect is between their views on the business cycle and those on the stock market; since last year, their optimism about the former has reduced while their bullishness about the latter has increased. A third disconnect is between their views on high-yield or junk bonds and equities. Normally, the two asset classes perform well at the same time. But investors are unenthusiastic about junk, preferring the debt issued by emerging market governments.

https://www.economist.com/blogs/buttonwood/2017/12/china-syndrome

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