Equity markets to “regain footing” in 2019 as economy grows and sees off risks after tumultuous year, Credit Suisse predicts
Global stock markets will “regain their footing” in 2019 and shareholders will see increased returns, Credit Suisse has predicted.
The Swiss banking giant, in its 2019 investment outlook, said the emerging market equities would recover from this year's weakness, while innovation would make the tech and healthcare sectors more attractive.
Financial markets have experienced a turbulent year, with all three major US indices slipping into the red and markets around the world suffering in the past few months.
Credit Suisse said that UK equities would give shareholders five per cent total returns next year compared with the -4.04 per cent returns so far this year led by “unexpected political developments” impacting financial markets.
It said those uncertainties would likely continue but the economic cycle would remain a key driver of markets.
Global chief investment officer Michael Strobaek said: “2019 looks set to be another year of growth, albeit at somewhat lower levels than in recent years.
“Given ongoing economic growth and monetary policy normalisation in developed markets with no immediate threat of contraction, we expect risk assets such as equities and emerging market hard currency bonds will likely recover their footing in 2019.”
Earlier this month the bank reported a pre-tax loss of Sfr 96m on its global markets division, which it attributed to volatile emerging markets, trade tensions and political uncertainties leading to a drop in client activity.
Its investment outlook today predicted UK GDP growth of 1.5 per cent next year, lower than the Office for Budget Responsibility's forecast of 1.6 per cent, but higher than the European Commission's prediction of 1.2 per cent.
But it said Brexit uncertainty could limit investment spending.
“We foresee somewhere stronger but still subdued growth in the UK. Uncertainty over the outcome of the Brexit process is likely to limit investment spending so long as the outlook for supply chains are not clarified,” Credit Suisse said.