<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = ""Predictable" is not a word you would use to describe the financial markets in 2018. Nobody could have predicted the almost unprecedented volatility of the US stock market in December, just two months after the fall of the S 500 high."data-reactid =" 11 ">" Predictable "is not a word you would use to describe the financial markets in 2018. Nobody could have predicted the almost unprecedented volatility of the US stock market in December , just two months after The S & P 500 hit a record.

Similarly, the speed with which the trade war between the United States and China began and then intensified is difficult to predict for anyone.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "That said, some other things happened l & # Last year Interest rates went up, as many of them, including myself, thought about doing it. slow motion Last year, this is not a surprise after the barnburner of 2017. "data-reactid =" 13 "> That said, some things that happened last year were less surprising. Interest rates rose, as many, including myself, thought they could do it – the pace of ETF inflows slowed down last year, which is not the case. a surprise after the success of 2017.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "When all was said and done, three of six predictions I did for 2018 proved correct. It's certainly not a percentage I'm going to gloat over, but it's also not going to stop me from looking back into my crystal ball for the 2019 forecast. So, without further ado, here they are, from most likely to least likely: "data-reactid =" 14 "> In the end, three of the six predictions I made for 2018 proved to be accurate.This is certainly not a percentage I I do not want more, but it will not prevent me from looking again at my crystal ball for the 2019 predictions. So, without further ado, here they are, from most likely to most minor:

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "US expansion becomes the longest of all time"data-reactid =" 15 ">US expansion becomes the longest of all time

Fears of a slowdown in the US economy and even a recession have hit the financial markets in the latter part of 2018, but an impending slowdown is unlikely and there is a good chance that world continues to hum in 2019.

Consumer confidence remains strong, bolstered by the booming job market; businesses are doing well following the 2017 tax cuts; and inflation is contained. There does not seem to be any brewing imbalance that could plunge the US into an organic recession this year.

A kind of shock emanating from overseas, such as a hard Brexit or a major slowdown in China (caused by an escalation of the trade war) – which are preventable – could push the economy to the limit. But unless that happens, the current US expansion is likely to be over 10 years in July, eclipsing the 1990s as the longest period of uninterrupted growth in American history.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "S & P 500 Rallies"data-reactid =" 19 ">S & P 500 Rallies

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This prediction is essentially an extension of the previous If the US economy escapes recession, US stocks should rebound from last year's disappointing results, while the S & P 500 posted a 4.4% loss. Vanguard Total Stock Market ETF (VTI) and the SPDR S & P 500 Trust ETF (SPY), should end the year in the green. "Data-reactid =" 20 "> This forecast is essentially an extension of the previous one.If the US economy emerged from the recession, US stocks should rebound after last year's dreadful result. the Vanguard Total Stock Market ETF (VTI) and the SPDR S & P 500 Trust ETF (SPY), are expected to end the year in the green.

Indeed, two consecutive years of decline for the venerable index are extremely rare. It did not even happen during the financial crisis. The S & P 500 fell 37% in 2008, rebounding 26.5% the following year.

We should go back to the bursting of the Internet bubble in the early 2000s to experience several consecutive years of decline, and before that, until the period 1973-1974.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Fed rate of increase"data-reactid =" 23 ">Fed rate of increase

A growing economy and rising stocks would allow the Federal Reserve to breathe a sigh of relief. The central bank has courageously maintained its optimistic growth prospects in the face of tumultuous markets and severe criticism from many market players.

Although traders moved from setting several rate hikes in 2019 to potential cuts, the central bank remained largely convinced that economic growth would justify a further tightening of monetary policy.

More recently, Fed Chairman Powell hinted that the central bank would be patient in its movements, recalling stock market and bond market swings at the end of 2018. But there is no indication that the Fed is ready to capitulate completely and put an end to its effects. this tightening cycle.

In fact, if the economy manages to overcome this latest fear of growth, it will probably raise the federal funds rate at least once. This will put upward pressure on short-term interest rates, such as the two-year Treasury yield. However, long-term rates, such as those at age 10 and 30, may not be as sensitive to Fed hikes.

If the Fed tightens excessively, the yield curve, in particular the much-guarded part of the curve over two to ten years, could reverse, raising fears of a recession.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "ETF inflows reach record levels"data-reactid =" 29 ">ETF inflows reach record levels

Entries for ETFs listed in the US slowed last year. From a record $ 476.1 billion in 2017, inflows in 2018 dropped to $ 315.4 billion. Even with the smallest transport, the 2018 inflows were second in importance.

A steep drop in the US stock market and a tumble in interest rates have not stopped investors from spending billions of dollars on ETFs. Even in December, a dreadful month for equities, investors added nearly $ 50 billion to ETFs.

The story continues

If 2019 is a better year for the markets, as I suppose, investors will continue to strengthen their positions in the ETFs. Not surprisingly, annual inflows for this year are at or above the record level of 2017. A monthly rate of $ 42 billion / month will add to $ 500 billion by the end of the year.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Bitcoin is approaching $ 1,000"data-reactid =" 37 ">Bitcoin is approaching $ 1,000

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "My prediction on bitcoin from last year was out of place. The cryptocurrency bubble did not get bigger, as I assumed. Instead, it erupted dramatically in 2018, much earlier and faster than I would have imagined. "Data-reactid =" 38 "> My prediction about last year's bitcoin was wrong.The cryptocurrency bubble did not grow, Instead, it exploded spectacular in 2018, much earlier and faster than I had imagined.

It's the story of bubbles. You never know how far they will grow or when they will burst – it is only that one day the music stops.

If 2018 has been the year of the bursting of the Bitcoin bubble, what will 2019 bring? I suspect that prices will continue to drop up to $ 1,000. It is a total and wild speculation on my part. Nobody knows where bitcoin prices will stabilize (or if they already have them).

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "But down 95% from the top – similar to the decline of Amazon's shares during the bursting of the internet bubble – this seems fair.Maybe from there, Bitcoin can it begin a process of saturation and allow speculative traders to begin

Unfortunately, there is still no registered Bitcoin ETF in the United States, but there are ETNs. available in Europe.

"data-reactid =" 41 "> But a 95% drop from the top – similar to the decline in Amazon's shares during the bursting of the Internet bubble – seems correct. Bitcoin may be able to start a demotion process and traders can start wading.

Unfortunately, there is still no registered Bitcoin ETF in the US, but ETNs are available in Europe.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "New king of the ETF hill: IVV"data-reactid =" 42 ">New king of the ETF hill: IVV

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "I'm going way on a branch with this one, and I have a strong feeling that this prediction is too early a few years. Nevertheless, on the basis of the trends observed in recent years, it seems inevitable that the iShares Core S & P 500 ETF (IVV) will eventually overtake the SPDR S & P 500 Trust ETF (SPY) as the largest ETF in the world. "data-reactid =" 43 "> I'm going way on a branch with this one, and I have a strong feeling that this prediction is too early a few years. Nevertheless, based on the trends observed in recent years, it seems inevitable that the iShares Core S & P 500 (IVV) ETF will eventually outperform the SPDR S & P 500 ETF Trust (SPY) as the largest ETF in the world.

In 2018, SPY posted cash outflows of $ 16.5 billion, compared to $ 18.5 billion for IVV. In the previous year, SPY had inflows of $ 10.6 billion, compared to $ 30.2 billion for IVV.

The assets under management gap between the two is quickly reduced because long-term investors are turning to cheaper IVV. Today, it stands at $ 91 billion – SPY with $ 242 billion in assets under management and IVV with $ 151 billion.

Do not mistake yourself; $ 91 billion is still a huge gulf. It would take about $ 45 billion outings for SPY and $ 47 billion for IVV to close this year. Unlikely? Sure. But certainly not impossible.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Email Sumit Roy at & nbsp;sroy@etf.com& nbsp; or follow him on Twitter & nbsp;sumitroy2"data-reactid =" 47 ">Email Sumit Roy at sroy@etf.com or follow him on Twitter sumitroy2

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