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Ignore the forecasts. No-one really knows what 2018 holds for markets

Infinox Contributor
Markets React To Proposed Bailout Legislation
Ignore the forecasts. No-one really knows what 2018 holds for markets (Source: Getty)

How will markets and the global economy perform in 2018? If you’ve not yet been confronted with a barrage of forecasts or predictions, then you’re likely to be in the coming days.

Trying to predict what will happen next year has become as much a part of the Christmas tradition as turkey, presents and overindulgence. And it’s not hard to see why. Markets are always trying to predict what will happen to stocks, shares, commodities, governments and economies - because that’s where the margin is.

But who would have predicted at the end of 2016 that Bitcoin would have surged in value by 1000%? That would have taken some clairvoyance indeed.

Few would have predicted the Dow Jones would have risen to a new record high 70 times in a single year either.

Almost no one expected Prime Minister Theresa May to throw away her majority in parliament in a June snap election. And were there many who believed the Bank of England would raise interest rates for the first time in a decade this year? Hardly anyone. Markets, until August, did not forsee a rate hike until the summer of 2019.

So, as you read the various predictions that oil will hit x Dollars per barrel in 2018, or that Bitcoin will surge to new highs, or that the global markets rally will collapse or Brexit negotiations will be a triumphant success, it might be worth bearing in mind that nothing is certain and that analysts can only work with the information they have in front of them right now.

Will the British government survive the next twelve months? Or, as Morgan Stanley has predicted, collapse, causing a snap election sometime next Autumn?

Will the global markets’ rally continue, boosted by President Trump’s tax reforms, which were passed in the Senate on Tuesday night? Some are already suggesting the current rally can’t last much longer. It has already gone on far longer than most market rallies do.

Could political events in the Middle East lead to war? What about North Korea? And, of course, who can forget Brexit?

For many of us these are the most unpredictable times we can remember. That makes them interesting times, volatile times but completely and utterly unpredictable. At least we won’t be bored.

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