While major economies have been knocked off balance, they’re not falling head over heels. We explain why we expect modest gains from equities in 2019.

The equity market rebound following the December rout and Christmas Eve low shows a wide divergence between the haves and have-nots. The U.S. market has shot up well ahead of other major indexes, while China and the U.K. have lagged meaningfully, and the rest are in the middle of the pack.

But the reality is that all major markets continue to face challenges. Economic concerns were one of the causes of the December selloff and they have not gone away despite the market bounce. Data are signaling the largest economies lost momentum late last year and will likely slow further this year. High-profile prognosticators such as the International Monetary Fund have lowered global and country growth estimates—capturing greater-than-usual attention from the business and mainstream press corps.

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