Share markets have rebounded strongly since the start of 2019 on the back of the US Federal Reserve suggesting interest rate rises are on hold. Will the rally continue throughout 2019?
It seems investors have become too excited by Chair Powell’s comments in relation to interest rates and are forgetting that the potential for more rate rises still exists.
Inflation is at target and the upward pressure on prices continues.
Add to this the bull market in global shares is reaching a mature stage with valuations looking increasingly stretched and it is clear investors need to be cautious.
In Australia, Sydney and Melbourne house prices remain expensive despite recent falls suggesting there may be further to fall.
This could start to have a negative impact on household consumption.
Conversely, China is stimulating its economy, which should be positive for the resources sector.
As always, being invested in the right asset classes is critical in 2019.
Brad Ferguson is the managing director at the Newcastle office of Bell Partners