Guide to the Markets - J.P. Morgan Asset Management

Guide to the Markets

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We are pleased to present J.P. Morgan Asset Management’s 1Q 2019 Guide to the Markets containing our analysis of economic and market data through December 31, 2018. Below you will find key slides that we believe are the most relevant to liquidity investors.

Since the end of the global financial crisis, the U.S. has experienced nearly a decade of economic expansion. However, as we enter 2019, the economy is facing greater pushback—from headwinds to growth and market risks we have not seen for quite some time. The challenge before the Federal Reserve (Fed), and liquidity investors, will be to navigate this transitional period, when macro data still signals a decent economy while at the same time, financial market movements suggest troubles ahead. Overall, given the late stage of the economic expansion, we believe that both perspectives have relevance—and so we should see higher front end rates, wider credit spreads and continued volatility over the course of the year. The good news is that liquidity products are designed to be robust in a variety of scenarios.

The 1Q 2019 Guide to the Markets attempts to provide a balanced view of both opportunities and risks in the investment environment. In particular, we examine:

  • Fiscal support for U.S. economic growth, weighed against cyclical headwinds (pages 19, 22 and 24)
  • What the markets are saying about risk (pages 4, 30 and 32)
  • The end of the Fed tightening cycle and the potential for an inverted yield curve (pages 31 and 33)
  • Geopolitical risks to the outlook (pages 47, 49 and 52)

As you consider these important topics, your Global Liquidity Client Advisor will be happy to share our market views and tailor liquidity solutions to best meet your needs.