Investment Managers Securities Analysts

Bermuda & Cayman


Our outlook for global economic growth has weakened slightly, in part reflecting the recent escalation in trade tensions. We agree with Bloomberg consensus estimates for an annualized global growth rate of 3.3 percent in 2019 and 2020.

  • In our view, policy uncertainty from Washington and geopolitical instability are the main factors holding back spending and investments causing economic growth in the US to moderate.
  • India’s economy is growing fast but slowing on weaker domestic consumption, moderating global growth, and trade tensions between the US and China.
  • On the back of a fundamentally strong US economy, a resolution to the trade wars cold result in a sharp upswing in global economic growth supported by pent up demand and increased business investing.

The world’s major central banks have shifted away from monetary policy tightening amid slowing global economic growth, trade tensions, and low inflation. 

  • We now expect the US Federal Reserve • In the eurozone the ECB is prepared for action to boost inflation and monetary policy easing is likely.
  • In the eurozone the ECB is prepared for action to boost inflation and monetary policy easing is likely.
  • At this point in the economic cycle we prefer corporate bonds with strong investment-grade credit ratings over lower rated, relatively better yielding ones.

Despite the Fed’s dovish shift, we have a neutral view on the US dollar due to our underlying relative optimism for the US economy.

  • We expect the Canadian dollar to trade in a range against the US dollar..
  • Sterling traders are pricing in a long summer of confusion with little progress on the UK exit strategy from the European Union.
  • Given numerous geopolitical and economic risks, most notably trade tensions, the Japanese yen and Swiss franc may benefit from safe-haven demand.

Hard commodities are expected to be range-bound with concerns looming regarding a slowing global demand environment and still elevated supply levels in many cases.

  • Upside price drivers to crude oil are roughly balanced by increasing non-OPEC production and slowing demand in China.
  • Gold will remain supported by geopolitical risk and potential US interest rate cuts.
  • A resolution to the US-China trade war could support agriculture commodities prices in Second Half 2019.

Volatility in financial markets will remain high near term amid trade tensions and an anticipation of an end to the economic cycle after a ten-year bull market.

  • In an environment of slowing economic growth and less certain earnings outlooks, the traditional defensive qualities and resilient earnings growth of Healthcare stocks look appealing.
  • We are underweight on Consumer Discretionary as current multiples, rising labour costs, and an increasingly late cycle environment are headwinds for the sector.
  • Our preference for Emerging Markets (EM) reflects solid earnings, stimulus in China, improving liquidity, and greater China A-shares inclusion in the MSCI EM Index.