×
Please note: Forecasts are based on assumptions, estimates, opinions and hypothetical models or analysis which may prove to be incorrect.

Christian Nolting, Global Chief Investment Officer, Deutsche Bank Wealth Management

Jan. 07, 2019

As we start 2019, we are looking down from one investment landscape (in terms of macroeconomic, policy and corporate environments) to a markedly different one. Over the last few years, we have seen many “peaks” – peak liquidity and then, probably, peak growth in GDP and corporate earnings in 2018. By contrast, prolonged market volatility in the closing weeks of last year suggests that 2019 will be more uncertain as markets struggle to reassess the new investment reality, given a range of apparently intractable geopolitical risks, most obviously U.S./China trade relations.

But, looking through the market noise, I think that it is possible to identify a number of themes that will run through the coming year. This year we have chosen six themes, based around the macroeconomic outlook, market conditions and the major asset classes. They can be summarised as follows:

Growth deceleration
Theme 1: Economy

Growth deceleration

Global growth is slowing and becoming less synchronised. As the U.S. upswing matures, Europe will suffer from political uncertainty and risks remain around China. But, despite monetary policy tightening, growth will not collapse.

Vigilant on volatility
Theme 2: Capital markets

Vigilant on volatility

Markets are struggling with the transition to a more normal policy environment. Other underlying volatility triggers will remain – including geopolitics, and softer GDP and earnings growth. Lower returns are likely for a given level of risk.

U.S. yields on the return
Theme 3: Fixed income

U.S. yields on the return

After a decade, we have got used to low yields on bond investments. Now, in the U.S. at least, this is changing, with the short end of the yield curve now attractive. Other fixed income opportunities exist, but so do risks – be selective.

Watch the video
Earnings ease
Theme 4: Equities

Earnings ease

Looking through recent volatility, global equities still have a lot going for them. Earnings growth could however fall short of expectations as global markets adjust to reality – as a result, we expect lower but still positive 12-month equity returns.

U.S. dollar and oil centre-stage
Theme 5: FX & commodities

U.S. dollar and oil centre-stage

We expect continued U.S. dollar strength in early 2019, but think that it will be gently eroded during the course of the year. After a sharp decline in oil prices at the end of last year, supply constraints should support some recovery in 2019.

Long-term investment – Tech transition
Theme 6

Long-term investment – Tech transition

Our “tomorrow’s themes today” now include ESG (environmental, social, governance) and enhanced infrastructure investment. But this may be the year to re-evaluate preferences within the tech sector as regulation bites and sector trends diverge.

Watch the video

The report “Beyond the peaks – Investment themes for the world ahead” has further sections on multi asset and alternatives investment.  It also includes our new macroeconomic and financial market numeric forecasts for 2019.

The following regional editions of the full report are available for download: 

CIO Insights - Beyond the peaks - 2019 (Europe EN)

 

CIO Insights - Beyond the peaks - 2019 (Americas EN)

 

CIO Insights - Beyond the peaks - 2019 (Emerging Markets EN)

In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. CIO Office, Deutsche Bank Wealth Management, Deutsche Bank AG - Email: WM.CIO-Office@db.com.

You may also be interested in

The "S" in ESG: the ugly duckling of investing

In this CIO Special report we show how social criteria are becoming an integral part of informed investment decisions.

  • 1 day ago
  • |
  • 2 mins read

Peak debt: sustainability and investment implications

Debt levels continue to rise around the world and there are growing concerns about how sustainable the current situation is. The situation may also have profound investment implications.

  • Nov. 07, 2019
  • |
  • 2 mins read

India: policy trends and asset class implications

India’s GDP growth has slowed in recent quarters due to weak consumption and exports, prompting new policy stimulus measures such as tax rate reductions and RBI policy rate cuts.

  • Oct. 30, 2019
  • |
  • 2 mins read

Will the U.S. consumer carry on the record expansion?

We outline the current macro-economic backdrop along with the risks that the U.S. economy now faces.

  • Oct. 23, 2019
  • |
  • 2 mins read

Europe: weak growth and its investment implications

Europe’s economic growth has deteriorated over the course of this year. A challenging external environment and domestic problems have weighed on exports and fixed investments.

  • Oct. 18, 2019
  • |
  • 2 mins read

Listed infrastructure investing: the "pure-play" approach

Investors should consider using a “pure-play” approach when it comes to investing in listed infrastructure.

  • Oct. 11, 2019
  • |
  • 2 mins read

Stay prepared: Q4 2019 investment themes and forecasts update

We review the investment environment and our six main themes for 2019 as we move into the closing months of the year.

  • Oct. 01, 2019
  • |
  • 5 mins read

Strategic Asset Allocation: Robustness amidst uncertainty

Our new special report describes our approach to Strategic Asset Allocation (SAA) – the key driver of multi-asset portfolio returns.

  • Sep. 19, 2019
  • |
  • 2 mins read

ESG yesterday, today, tomorrow – sustainability across the centuries

The history of ESG investing shows why the concept of ‘sustainability’ has always belonged to the people.

  • Sep. 17, 2019
  • |
  • 2 mins read

The content and materials on this website may be considered Marketing Material. The market price of an investment can fall as well as rise and you might not get back the amount originally invested.  The products, services, information and/or materials contained within these web pages may not be available for residents of certain jurisdictions. Please consider the sales restrictions relating to the products or services in question for further information. Deutsche Bank does not give tax or legal advice; prospective investors should seek advice from their own tax advisers and/or lawyers before entering into any investment.