Minton Beddoes says to expect
turbulence in share prices, interest rates and currencies in 2015. “It’s
not a grim prediction,” she says. “It is a prediction for more
volatility.”
Can big business stomach it?
The U.S. economy is relatively strong
approaching the New Year. A surge in consumer spending boosted the
economy's growth rate to 3.9% last quarter and its strongest six-month
performance in more than a decade. Stocks continue to set new record
highs. And after a blockbuster November jobs report released on Friday,
2014 will see the strongest job growth since 1999.
But at the same time, the rest
of the leading global economies are struggling. Japan’s economy is now
officially in a recession and Europe is teetering on the brink of one.
China’s economy is still growing but at a much slower pace after being
one of the main drivers of the global economy over the past decade.
Russia is getting hit by lower oil prices and economic sanctions levied
by the U.S. and European Union as the conflict in Ukraine continues.
“The other parts of the rich
world [are] not doing very well, with monetary policy going in the
opposite direction.” Minton Beddoes says the emerging world looks
“sluggish at best.”
Global economic growth has been
sluggish since 2012. Slow growth isn’t always good for businesses but in
this environment it has been. U.S. corporations are buying back shares
of their own companies at the fastest pace since the financial crisis.
Stock buybacks hit a record $500 billion by mid-year. At the same time,
sky high profits have boosted merger and acquisition activity. Deals are
likely to top $3 trillion in 2014.
At the same time all this macro volatility is taking place, Minton
Beddoes points to a huge amount of disruption going on at the micro
level coming from the digital revolution which she says is accelerating.
“Disruptive innovation is a total cliché but it’s really happening and
it’s happening in more and more industries."
Companies like Uber, Airbnb,
Kickstarter and Rent the Runway have shaken up big business. They are
part of a class of tech start ups that can upend an entire industry.
Minton Beddoes says a relatively stable global economy has been able to
absorb this digital revolution so far but that may change in 2015.
“If
you’re a CEO, you have to be rethinking how you are going to deal with
the new digital environment," she says. "You’ve been able to do that
against a fairly placid macro economic backdrop, now you have to deal
with volatility both above and below."
Culled from Yahoo
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