Q2 2018 International and Global Growth Equity Strategies
We have previously highlighted that the tightening of monetary policies by the major central banks poses one of the greatest risks to global markets as it pressures valuations for financial assets. We think this remains true in the long-term, but in the short-term it appears that monetary policies are very likely to diverge as Europe and Japan stay on a course of easy money. This spring will stay coiled for a little longer.
However, this did not provide much relief. The continually escalating nature of President Trump’s trade war seems to have the most potential to derail the global economy. On a percentage basis of inter-regional trade, stakes are still small, but entire industries are being played as chess pieces. And in Europe, a Euroskeptic government in Italy means the political situation in the European Union (E.U.) is poised to become thornier.