Slowing economic growth in the U.S. and Europe is a fact. We admit the risk, that the current sharp market sell-off could front-run the real economy and increase the speed of an economic softening.
The US/China trade conflict and the US Fed’s monetary policy are the two dominant macroeconomic factors to be focused on in Q1 2019.
It is hard to see how the Eurozone could decouple from the US and surprise on the upside, taking into account protests in France, the Italian budget and Brexit.
US/China trade-war-related uncertainties will increase again, should negotiations fall short of what is necessary to meet the March 1, 2019 deadline.
The world enters a low growth environment with the risk of a shallow recession. That said, the west looks partly ill-prepared to deal with a recession.