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<p>PLAINS TWP. &#8212; Wico van Genderen, president/CEO of the Greater Wilkes-Barre Chamber of Commerce, said the economy, like the weather, can be unpredictable.</p><p>But the featured speaker at the Chamber&#8217;s Capital Markets Forecast Breakfast did his best to let about 50 of his financial market colleagues know what to expect over the next 12 months.</p><p>Eric W. Taylor, Wilmington Trust&#8217;s administrative vice president and national investment advisory lead, gave a detailed presentation Thursday on all aspects of the investment world.</p><p>Taylor began his presentation at the Holiday Inn East Mountain by stating that 2018 was a difficult year for equities.</p><p>&#8220;Volatility returned in 2018, with U.S. equities experiencing the worst pullback since 2011 &#8212; a decline that was similarly driven by headline events &#8212; but did not lead to the end of the bull market,&#8221; Taylor said. &#8220;Volatility increased in 2018 and overall equity performance was poor, but we do not expect a similar outcome in 2019. Multi-year declines are rare and typically only occur during recessions. We expect a deceleration of U.S. GDP growth in 2019 to around 2.25 percent, still a far cry from recession.&#8221;</p><p>Taylor offered four market drivers for 2019.</p><p>&#8226; <strong>Political</strong><strong> uncertainty:</strong> Taylor said Washington, D.C., tensions are high and risks numerous, including those related to the budget, debt ceiling, geopolitics, and legal investigations.</p><p>&#8226; <strong>Trade:</strong> Even if a March 1 trade deal between the U.S. and China is struck, uncertainty about the future relationship could remain an overhang on markets.</p><p>&#8226; <strong>Federal</strong><strong> Reserve:</strong> As the federal funds rate approaches the &#8220;neutral rate,&#8221; the risk of a policy mistake by the Fed rises, though modest inflation gives the Fed room to slow their pace.</p><p>&#8226; <strong>Tech</strong><strong> revolution:</strong> Technological investment and horizontal digitization present an opportunity that could result in disinflation, higher productivity, a slower Fed, and an extension of the business cycle.</p><p><strong>New Industrial Revolution</strong></p><p>Taylor said the fourth Industrial Revolution is upon us.</p><p>&#8220;Expansive technological advancements have affected every facet of our existence as human beings, and in the process, have been the drivers of economic growth and market returns,&#8221; he said. &#8220;We are in the midst of the Fourth Industrial Revolution, spurred on by an exponentially paced sequence of technological advances.&#8221;</p><p>Taylor went on to say horizontal digitization &#8212; digital and data at the core of nearly every economic sector and enterprise &#8212; has transformed the entire industrial complex, with sweeping and critical implications for the economy and markets.</p><p>In a news release on the company&#8217;s website, Tony Roth, chief investment officer at Wilmington Trust Investment Advisors, said when he was a child, technology was situational.</p><p>&#8220;TV stations would go off at the end of the day,&#8221; Roth said. &#8220;My boyhood home was truly dark at night &#8212; free from the glow emitted by digital clocks, blinking lights, and power strips. Contrast that to our world today with always-on TV channels, smart homes, and even the computer timepiece on my wrist that counts my steps, notifies me of messages, and, of course, tells the time.&#8221;</p><p>Roth said technology has profoundly transformed our lives and the economy.</p><p><strong>Predictions</strong></p><p>Wilmington Trust&#8217;s Investment Committee says:</p><p>&#8226; GDP growth will abate to 2.25 percent on slower consumer spending and other factors.</p><p>&#8226; The labor market will continue to tighten, though the unemployment rate is unlikely to drop below 3.5 percent due to higher labor market participation by younger workers; wages will continue to grind higher, but in a controlled manner.</p><p>&#8226; Inflation will settle into a longer-term run rate of 2.5 percent (CPI) and 2 percent (Fed-preferred PCE).</p><p>&#8226; The Fed will increase rates two times, with potential for a third hike.</p><style>
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<div class="neCaption">Eric W. Taylor, Wilmington Trust&#8217;s administrative vice president and national investment advisory lead, speaks at the Greater Wilkes-Barre Chamber&#8217;s Capital Markets Forecast Breakfast at the Holiday Inn in Plains Township on Thursday. </div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2019/02/web1_TTL023119Chamber2.jpg</photo0><caption0>Eric W. Taylor, Wilmington Trust&#8217;s administrative vice president and national investment advisory lead, speaks at the Greater Wilkes-Barre Chamber&#8217;s Capital Markets Forecast Breakfast at the Holiday Inn in Plains Township on Thursday. </caption0><photoCredit0>Aimee Dilger | Times Leader </photoCredit0></div><div class="neFile"><img class="neImage" src="https://www.timesleader.com/wp-content/uploads/2019/02/web1_TTL023119Chamber1.jpg">
<div class="neCaption">Eric W. Taylor, Wilmington Trust&#8217;s administrative vice president and national investment advisory lead, speaks at the Greater Wilkes-Barre Chamber&#8217;s Capital Markets Forecast Breakfastat the Holiday Inn in Plains Township on Thursday. </div></div><div class="metaInfo"><photo1>https://www.timesleader.com/wp-content/uploads/2019/02/web1_TTL023119Chamber1.jpg</photo1><caption1>Eric W. Taylor, Wilmington Trust&#8217;s administrative vice president and national investment advisory lead, speaks at the Greater Wilkes-Barre Chamber&#8217;s Capital Markets Forecast Breakfastat the Holiday Inn in Plains Township on Thursday. </caption1><photoCredit1>Aimee Dilger | Times Leader </photoCredit1></div></div>
<div class="metaInfo"><bylineMeta><p>By Bill O&#8217;Boyle</p><p>boboyle@timesleadser.com</p></bylineMeta></div>

Chamber breakfast features financial markets expert