- Global economic growth should continue in 2019, despite headwinds from trade disputes, with positive momentum in the U.S. and mixed economic trends internationally.
- Strong earnings growth in 2018 and the recent market pullback make U.S. valuations attractive amid moderate economic growth.
- European GDP growth should stay positive in 2019, but major E.U. economies are seeing growth slow; while Asia’s economic outlook is mixed, Asian markets stand to benefit as trade tensions ease.
- Longer-term U.S. interest rates should reverse some of their recent pullback as investors’ concerns over economic growth abate.
- We favor U.S. equity sectors with both cyclical and secular tailwinds, like Information Technology and Communication Services, while avoiding more economically-cyclical sectors, like Industrials and Energy.
- We continue to underweight European equities, where economic growth trends are unlikely to improve in the near-term; we see better international opportunities in Asian equities, where declining relative valuations have improved the region’s risk/reward profile.
- Emphasis of short-duration fixed income securities and avoidance of U.S. Utilities and Real Estate equities limit interest rate risk.
• U.S. Consumer Staples Equities
• U.S. Health Care Equities
• U.S. Energy Equities
• U.S. Industrials Equities
• U.S. Utilities Equities
• U.S. Treasury Securities
• South & Central American Equities