Thursday, January 3, 2019

"Byron Wien Announces Ten Surprises for 2019"

1) He will be retail.
2) Just kidding Mr. Wien.
3) Oh crap, he's gonna put out a contract on me, dude's cold-blooded.

From Blackstone:
New York, January 3, 2019 – Byron R. Wien, Vice Chairman in the Private Wealth Solutions group at Blackstone, today issued his list of Ten Surprises for 2019. This is the 34th year Byron has given his views on a number of economic, financial market and political surprises for the coming year. Byron defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable,” having a better than 50% likelihood of happening.

Byron started the tradition in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley. Byron joined Blackstone in September 2009 as a senior advisor to both the firm and its clients in analyzing economic, political, market and social trends.
Byron’s Ten Surprises for 2019 are as follows:
  1. The weakening world economy encourages the Federal Reserve to stop raising the federal funds rate during the year. Inflation remains subdued and the 10-year Treasury yield stays below 3.5%. The yield curve remains positive.
  2. Partly because of no further rate increases by the Federal Reserve and more attractive valuations as a result of the market decline at the end of 2018, the S&P 500 gains 15% for the year. Rallies and corrections occur but improved earnings enable equities to move higher in a reasonably benign interest rate environment.
  3. Traditional drivers of GDP growth, capital spending and housing, make only modest gains in 2019. The expansion continues, however, because of consumer and government spending. A recession before 2021 seems unlikely.
  4. The better tone in the financial markets discourages precious metal investors.Gold drops to $1,000 as the equity markets in the United States and elsewhere improve.
  5. The profit outlook for emerging markets brightens and investor interest intensifies because the price earnings ratio is attractive compared to developed markets and historical levels. Continuous expansion of the middle class in the emerging markets provides the consumer buying thrust for earnings growth. China leads and the Shanghai composite rises 25%. The Brazil equity market also comes to life under the country’s new conservative leadership...

Mr Wien is vice chairman of Blackstone subsidiary Blackstone Advisory Partners.
Before that he was  Chief U.S. Investment Strategist at Morgan Stanley.