As the first half of 2018 has come and gone, we present the LPL Research Midyear Outlook 2018: The Plot Thickens– taking a deeper dive into the economic forces that may impact global markets.
The first half of 2018 has seen a pickup in market volatility. However, the fundamentals of the U.S. economy are generally strong. Thanks to the help of tax cuts and increased investment, the U.S. economy continues to expand. Globally, look for growth to continue, specifically in emerging markets. While investors keep their attention on potential tariffs, we believe the pro-business fundamentals will outweigh the potential impacts.
When investors began 2018, we tuned in to the recent fiscal policy changes that were expected to propel economic activity and the financial markets higher in the coming year. The hand-off in leadership from monetary policy to fiscal policy was well underway as a driver of consumer spending, business investment, and corporate profits. Instead of depending on the Federal Reserve (Fed) to move this expansion forward, fiscal incentives are now critical for continued growth, with the new tax law taking the lead.
Although we expect continued growth, there is also the potential for greater market sensitivity due to the late cycle concerns that can emerge when the economy is doing well. So indeed, the plot has thickened. But that doesn’t mean we’ve taken a turn for the worse. The underlying forces are still forging ahead and this expansion and bull market have not been defeated. Right now, there are many positive fundamentals, like business investment and corporate profits, supporting economic growth and potential market gains.
Click below to read the complementary in-depth report with more detailed forecasts on the most relevant topics. We expect clients can remain optimistic about what’s ahead for their investment portfolios. We believe this guide serves as an important reference tool in conjunction with the Granite team’s active management of
your long-term goals.
Short on time & just want the summary? Read the Midyear Executive Summary
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. The economic forecasts set forth in the presentation may not develop as predicted. Past performance is no guarantee of future results.
This research material has been prepared by LPL Financial LLC.
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