We have revised up our end-2019 forecasts for equities, which previously pointed to a large correction. But even without this big pothole, we continue to think that the road ahead for them will be bumpy. Admittedly, we had underestimated the extent to which looser monetary policy would shore up stock markets. But the further easing that we anticipate in some cases is already discounted. Meanwhile, with the global economy likely to remain in the doldrums, and the US-China trade war not going away, we suspect that corporate earnings will struggle to live up to investors’ expectations of a rebound.
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