The world, according to Deutsche Bank researchers, remains in a pretty good place. Global growth of 3.9% is expected this year, slightly ahead 2017. This is made up of marginally higher emerging markets growth (5.1% ) and flat developed markets growth (2.3% ). The numbers don’t sound especially high,but in apost-GFC world thisisa very solid outcome.

A positive view: While Deutsche remain positive, they also expect 2018 to mark the peak of this cycle’s growth. For the US, China and Europe they see growth continuing but no longer accelerating.

The contrary view: Jonathan Pain, a particularly insightful market commentator, holds a more worrying view. He sees current markets being driven by three key influences (1) strength in corporate earnings (a positive), (2) rising inflation (a negative) and (3) rising trade tensions (also a negative). Inhisview,thesefactorswill put the USmarket on a collision course withrealityinthenextfewmonths-and that doesn’t sound good.

Will the rate of growth peak, but with growth continuing, or is the bull market very close to its end? Answering this question largely depends on your view of how the trade tensions between the USand China will play out. If there is a spiral of new trade barriers from the USand counter-measures from China and elsewhere, then it could be hard to find anywhere to hide in equities. However if the USand China make a lot of noise but begrudgingly agree a solution before it gets out of hand, then markets will be sanguine. Because both the USand China will each act in their own self interest – and an all out trade war is not in their self interest- we favour the later option (a solution is agreed before this gets totally out of control). But getting to this resolution may take some time.