2018 Macro Investment Outlook

January 31st 2018

Silhouette of A girl doing Yoga on a sunset beach, standing as a part of the Number 2018 sign

Key points

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Although 2017 saw the usual worry list – around President Trump, elections in Europe, China, North Korea and Australian property – it was good for investors. Balanced super funds had returns at around 10%, which is pretty good given inflation was around 2%. This year has started favourably but volatility may pick up as geopolitical threats loom a little larger and US inflation rises.  This note provides a summary of key insights on the global investment outlook in simple dot point form.

Five lessons from 2017

Key themes for 2018

Seven things to watch

Four reasons why global growth is likely to be strong

Three reasons why a grizzly bear market is unlikely

Shares are overdue a decent correction and even a brief (or gummy) bear market (where shares fall 20% but are back up a year after) is possible. But a deep (or grizzly) bear (where shares fall 20% and a year after are even lower) is unlikely:

Three reasons why risks around Trump may rise a bit

For 2017, we expected Trump the business-friendly pragmatist to dominate, but there are several reasons why we may see a bit more of Trump the populist in 2018:

Three reasons why the trend in bond yields is likely up

Three reasons why Chinese growth won’t slow much

Five reasons Australia won’t have a recession (again)

A downturn in the housing cycle and uncertainty around the consumer are the main risks facing Australia but against this:

The next move in Australian interest rates will likely be up, but the RBA will wait for more confidence on growth & that inflation has bottomed before starting to gradually hike later this year.

Five reasons to expect more share market volatility

Three reasons Bitcoin is a bad “investment”

Nine things investors should remember

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About the Author

Dr Shane Oliver, Head of Investment Strategy and Economics and Chief Economist at AMP Capital is responsible for AMP Capital’s diversified investment funds. He also provides economic forecasts and analysis of key variables and issues affecting, or likely to affect, all asset markets.


Important note: While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.