Investors have plenty of reasons to worry about their wallets next year.
Tariffs, freight costs and wage hikes are beginning to affect record-high corporate profits.
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The Federal Reserve's rate hikes are raising borrowing costs. That's squeezing the credit-sensitive housing and auto markets, and leading to fear the Fed will hike the United States into a recession.
The corporate tax cuts enacted in late 2017 won't boost bottom lines next year any more than they did this year. Boom-to-bust oil prices have crashed into a bear market. Germany and Japan, the world's No. 3 and No. 4 economies, are already contracting.
On top of all that, China and the United States are locked in a trade war.
But there are bright spots ahead.
A recent review of capital spending plans found that companies are expected to spend 3.7% more in 2019 than they did in 2018, said Tobias Levkovich, Citigroup chief US equity strategist, in a recent note. A similar study last year predicted just a 3% increase.
Interactive media and services companies are expected to sharply increase their spending.
When companies spend, they inject money back into the economy. That's good news for consumers and investors alike.
And there's good news ahead from small businesses, Levkovich said. Many plan to hire new employees or expand their businesses.
"Small business data is encouraging," he wrote.
Levkovich will join CNN Business editor-at-large Richard Quest on "Markets Now" on Wednesday to discuss capital expenditure and the biggest risks to the market today.
"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.
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