After all the bullish buoyancy of 2010, the US economy finally looks set to slow in 2019. President Trump’s fiscal stimulus has probably done enough to avert a recession for now, but cyclical concerns are likely to become a major market driver in H2. Regardless, there’s limited room for equity upside in a world of stretched valuations and tighter liquidity conditions, even accounting for the sell-off of late 2018. Greater downside pressure seems inevitable, but risk reducers could provide some comfort. Fed policy will also be a focal point, but for the moment it seems more interested in sustaining the ongoing recovery rather than trying to cool possible overheating. So, what should your US equity strategy potentially look like? See why, despite headwinds, US equities should keep flying high in the near term.
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