Towards a rally in financial markets in 2019

We look at financial markets in the United States and the euro zone. Their very depressed level currently is compatible with the assumption of a recession in 2019. However, we believe there will be a cyclical slowdown and not a recession; This is first due to the fact that financial markets are overestimating the risks (Brexit, trade war, Italy, declining liquidity, leverage), and also the fact that financial markets believe that some countries (Italy) may pull out of the euro, which is impossible; This is also due to the fact that financial markets fail to tak e into account a number of factors supporting activity (low interest rates, expansionary fiscal policies, lack of inflation , rising corporate profitability, solidity of companies' financial situation). Once investors switch from a crisis scenario to a cyclical slowdown scenario, there will be rally in financial markets with a major decline in all risk premia.