While global growth is certainly respectable, political risk is casting shadows. Trade protectionism remains a key theme, and while a US-Canada-Mexico deal is encouraging, US-China-EU tensions linger. US mid-term elections in November could lead to President Trump focusing even harder on this issue. Europe has its own problems, with concerns about the Italian budget negotiations and “no-deal” Brexit noise growing. Emerging markets aren’t immune with rising US borrowing costs and the strong dollar compounding domestic fundamental problems in key markets. Financial markets have a lot to consider in 4Q18.
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