Press release
T. Rowe Price 2019 Midyear Market Outlook: Time To Navigate Crosscurrents, Not Time To Be A Hero
BALTIMORE, June 19, 2019 /PRNewswire/ -- NEWSOn the heels of a tough 2018 for many major financial markets, the uptick for much of the first half of 2019 has
About this update from T. Rowe Price Group, Inc.
[{"type":"text","content":"BALTIMORE, June 19, 2019 /PRNewswire/ --\nNEWSOn the heels of a tough 2018 for many major financial markets, the uptick for much of the first half of 2019 has been swift and dramatic. In U.S. equities, the S&P 500 and Nasdaq indexes tested new highs after skirting with bear market territory in December 2018. International equities also got off to a generally strong start in 2019, with China leading the pack ahead of Europe, Japan, and emerging markets. In fixed income, virtually all corners of the market, from high quality to below investment grade, have been outstanding in the first half of 2019. High yield and emerging markets, particularly, bounced back strongly after a difficult 2018.\nHeading into the second half of 2019, senior T. Rowe Price investment leaders remain cautiously positive in their outlooks about global economies and financial markets, but they warn that escalating trade disputes and populist politics in many regions have created notable downside risks.\nMonetary expectations have shifted dramatically since the beginning of the year, with the Federal Reserve now seen as likely to cut interest rates before the end of 2019. Growth in Europe has weakened, as the region's vulnerability to trade risks and China's slowing economy have become more apparent. Unresolved Brexit issues continue to loom as a threat. Global central banks would like to normalize monetary policies and gradually raise interest rates, but they are constrained by disappointing economic data.\nKEY 2019 MIDYEAR OBSERVATIONS\nThe U.S. economy is in a \"muddle through\" mode. While it is slowing, major imbalances that would suggest a recession is imminent or even likely are not on the horizon. Employment markets are in solid shape, with unemployment at historic lows, yet there is very little inflation, wage inflation or otherwise. Economies outside of the U.S. are growing below trend. Earnings momentum has turned negative in Europe and Japan, while currencies are struggling versus the U.S. dollar. The economic expansion that has taken place since the end of the global financial crisis about 10 years ago has experienced periods of sluggishness, notably in 2011 and in late 2015/early 2016. Slowdowns do not necessarily mean the end of the economic cycle. Cycle ends are typically preceded by some form of misallocation of capital or \"irrational ex...