Like every beginning of years, the usual cassandras come to predict the apocalypse for the year to come.
The main themes selected? The rate hike that will slow down a global economy that does not need it, global trade challenges or the effects of a political attitude considered dangerous here or there.
It may be necessary to admit that the reasons for a possible correction could come from an excess of optimism rather than negative elements of this type.
An increase in rates can only be reasonable and not likely to question the funding of corporate projects. On the other hand, it may make debt management more complex for several countries and learn the hard way expenditure management
Trade tensions have always found a reasonable outcome
But strangely, no one speaks about the mass of liquidity that continues to flood in the markets (Private Equity included). No one mentions the current unreal valuations or the fact that this race for mega fundraising start-ups in countries like the US or China is the preparation for European buyout operations that will never have the same financial capabilities to conquer the world.
And on this point, a major risk of painful awakening and temptation to protectionism may happen one day.
But we bet that this is not for this year. Now is dancing time where the Unicorn orchestra accompanies many mega-deals waltz to come. January is already busy.
But we must be aware for the end of this year and most probably in 2020.....
Pierre Louis Amancic, Senior Advisor