Some circles are predicting that the U.S. economy will soften if the real GDP growth slows to a predicted 2.4% this year. This is a drop from 3.1% in 2018, and by the fourth quarter of 2019, a projection by Goldman Sachs sees year over year growth of 2.7% in consumer spending. When the economy slows then you will find that companies will invest less in heavy equipment and other fixed expenses. Business fixed investment of 4.2% is predicted, residential fixed investment could lie at 1.3% and Federal spending could be set at 3.8%.
The global economy is predicted to grow by 3.1% in 2019 and the GNP growth should slow in key markets like Japan and Europe. It is not expected that U.S. companies will struggle at all with exports to China although the relations between the U.S. and China remain tenuous at best. Unfortunately, the Trump administration tends to make dramatic announcements in order to gain a basis for their negotiations (remember North Korea?) The renewed fears about the tariff negotiations that pushed up recent market volatility, and now the world watches to see if the ‘trade war truce’ is legitimate or not or whether tariffs represent the long-term trade policy of the U.S.
With all of this uncertainty in the U.S., Europe, and Japan, investors are finding it harder to make a safe investment. Interest rates are low, and the real estate capitalization rates are not desirable. To this end Goldman Sachs predicts the ten-year Treasury rate to reach 3.2 by the final quarter of 2019.
There is also the very big possibility that many U.S. manufacturers are now tired of China’s currency instability, and with the threats of possible tariffs, many are considering other countries to shift their production to including Mexico, India, Malaysia and Thailand.
It is expected that 5G could be the technology of 2019 as well as AI and the internet of things (IoT) expected to get a lot of attention too. The improvement of processing speeds by up to 10 times could even support remote surgeries and possible food delivery drones.
The recent new gambling legislation in the U.S will see even more changes happening in the gambling industry, and it is expected even more States will join in legalizing sports betting in order to gain the revenue it brings. This will mean that U.S, citizens will be able to find the best pokies online in a more relaxed manner, and as more States work out the creases to their particular legislation then we can expect operators to gain their gambling licenses.
