Markets

Will geopolitics sting again in 2019?

Annie Spratt / Unsplash
Annie Spratt / Unsplash

2018 offers a reminder that geopolitics matter. Our analysis suggests increasing uncertainty around rising trade tensions has been a major drag this year on equities, offsetting solid earnings growth, as tough U.S. trade talk turned into trade actions. We see geopolitics once again set to cast a shadow on markets in 2019. Our BlackRock Geopolitical Risk Dashboard , where we analyze the likelihood and market impact of our top 10 geopolitical risks, shows geopolitical risk marginally higher since September, whereas market concert about geopolitical risk has come down from earlier highs. Our analysis suggests geopolitical risks overall pose a material risk to markets in the year ahead: We find that the lower the market's attention to geopolitical risk, as evident in our BlackRock Geopolitical Risk Indicators (BGRI), the greater the potential market impact. The chart below shows the declining market attention overall, via our Global BGRI.

Impact of geopolitical shocks on global markets

global growth slows in 2019 -- Global trade tensions U.S.-China relations -- our full dashboard

Potential European fragmentation

European fragmentation Gulf tensions Russia-NATO conflict

Risk of cyber-attacks

Major cyberattack(s)
179450 BGR dashboard promotion_Chart_cyber_attach_v2
Isabelle Mateos y Lago is BlackRock's Chief Multi-Asset Strategist. She is a regular contributor to The Blog .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

    BlackRock

    BlackRock offers breadth of capabilities - and depth of knowledge – across active and passive strategies, including iShares® ETFs. This is combined with a singular focus on delivering strong, consistent performance and an ability to look across asset classes, geographies and investment strategies to find the right solutions.

    Learn More