In a 2-2-2 World, Look for Modest Economic Growth and Expansion

The post-election outlook has investors questioning the state of the global economy, volatility, corporate earnings, and the direction of interest rates. This month, we forecast modest growth and expansion as we examine prospects for China and emerging markets, volatility, corporate earnings, and the future of the global economy.

At long last, the presidential election of 2016 is entering its final stages. In one form or another, this election has occupied an outsized place in American life since the middle of 2015, by far the longest and most extensive political campaign we’ve ever experienced. Much of this campaign season’s noise will have little impact on markets, the economy, interest rates, economic growth, or the fate of companies. In many respects, there is an inverse relationship between the furor of this election and its clear impacts—particularly if Hillary Clinton and the Democrats win.

So what should we be attending to as we look past the election? Investors should ask at least four major questions: (1) What lies in store for China and emerging markets? (2) What market volatility should we expect? (3) What are the prospects for corporate earnings and revenue growth? And, 4) What is the general arc of the global economy and markets over the next few years?

Each question is distinct, of course, but the composite answer is quite simple: barring some global economic crisis, the landscape appears relatively placid. Certainly, bouts of concern and volatility will appear, but overall, we remain in a period of stasis, with a bias towards modest growth and expansion.