Equities, overseas and at home, have continued to struggle and are still well below their previous peaks...

Looking ahead, the global economy looks like continuing its already long post-GFC expansion into 2019, which should be supportive for growth assets, but equities remain overdependent on the performance of American shares and the American economy, and there are risks (notably around trade wars and potential mistakes from accidentally overtightening monetary policy) which could derail the outlook...

The New Zealand economy faces at least short-term growth challenges as businesses face higher costs...

The world economy is still growing, which is a generally positive background for risk assets, but investment outcomes have become overdependent on ongoing gains from U.S. equities. The most likely outlook is ongoing global expansion, though trade wars, monetary policy mistakes, problems in some emerging markets, and geopolitical shocks are all real risks to monitor...

In New Zealand, there is clear evidence that the economy is slowing down, with one outcome being the response from the central bank to keep interest rates low for even longer...

Markets in recent weeks have been upset by the potential threat to world economic activity from trade frictions between the United States and other major countries and trading blocs. There have been other episodes of concern over global growth since the current post-crisis global recovery set in...