At the beginning of last year we warned our clients that 2018 was likely to see heightened volatility, particularly in equity markets. And we were right. After a choppy start, the S&P 500 had risen almost 10% by late September, only to fall sharply through Q4 as fears of a global trade war began to mount. By late December, the US benchmark was down more than 20% on its autumn peak. With developed economy equities around 40% overvalued in our judgement, is the bubble about to burst? Probably not. We expect US growth to remain comfortably above trend through 2019. And in that environment, we do not expect to see a meaningful correction, even though volatility is likely to remain elevated — that is more an issue for 2020.
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