Growth is also gearing down for the Eurozone, where mainstream political parties continue to be challenged from all sides, and political relations are becoming more confrontational as Europe tries to avoid a disruptive Brexit. Slower global growth is weighting on commodity price expectations and emerging market vulnerabilities -- notably in Latin America -- are being exposed by fragile investor sentiment, as well as episodes of capital outflow pressures which are putting a strain on currencies. China’s past policy tightening combined with a more uncertain external environment, has slowed activity a bit more than expected. Policymakers are taking moderate steps to boost activity, bank funding costs are down but lending rates remain stubbornly steady and credit growth continues to fall. Although volatile equity markets suggest investor concerns about a disruptive deleveraging are ratcheting up, China still has policy space to guide for a gradual growth slow down.

The New Year will likely ring in a new record for the U.S. expansion, but could it be a last hurrah? Although financial stress is likely to remain low, North America’s aging credit cycle could move closer to a turning point in 2019.

Credit conditions are generally satisfactory, amid prospects for more modest growth, further increase in borrowing costs, and continued trade worries. The current cycle has a good chance of becoming the longest ever. But the risk of recession for the U.S. has risen and growth will likely slow even if the U.S.-China tariff dispute doesn't escalate into a trade war.

Don’t push the panic button on emerging market sovereigns. Weaker commodity price expectations and significant fiscal challenges could squeeze credit conditions, adding to pressures from rising U.S. interest rates, volatile capital flows and weaker currencies.

We expect challenging credit conditions in Latin America to continue in 2019. Several factors will continue influencing investors' decisions over the coming year, including trade tensions between the U.S. and China, continued rate hikes in the U.S., and commodity price trends. Domestic factors will also be relevant, since although political risks have dissipated in some countries, challenges remain for the new administrations. Additionally, tighter financing conditions and significant fiscal challenges in many countries will result in sluggish economic growth over the next two years.

Countdown to Brexit: No deal moving into sight. The credit impulse is decelerating, political relations in Europe are more confrontational and the potential for confidence shocks to accumulate is large, amid rising Brexit uncertainties.

Credit rating trends remain relatively positive overall but are showing some signs of peaking now that global growth is slowing, rates are gradually rising, and the credit impulse is decelerating. Add in the need to plan for potential costly disruption arising from political decisions and regulatory changes (trade, Brexit, environment), then the scope for confidence shocks to accumulate is large.

Our investor poll suggests bumps ahead on China's long road to deleveraging. Escalating U.S.-China trade tensions have had small direct effects -- still financial stability risks have moved Chinese authorities to loosen monetary policy and deliver a moderate fiscal expansion.

We expect credit conditions in Asia-Pacific to tighten further in 2019. With U.S. interest rates rising and sentiment weaker, financing conditions are likely to constrict as macroeconomic indicators soften.

Competition to lend is strong -- especially among European banks -- and many corporate borrowers are ahead of upcoming debt maturities, so refinancing risk is manageable. At some point, higher costs will bite nonfinancial borrowers as benchmark interest rates continue to climb toward historical norms.

Volatile emerging market capital flows, wider credit spreads (even in developed markets) and the challenge some speculative-grade borrowers face accessing domestic, or foreign currency funding from global bond markets, suggests investors are more risk averse. Other financing risks include a build-up in leveraged lending and growth in the speculative-grade universe, especially among borrowers rated ‘B-‘ or lower (now 25% of all rated issuers in the U.S.) -- a group that usually accounts for the majority of defaults in times of financial stress.

The U.S. is positioned to lead the slowdown. Chinese growth will moderate. Europe's growth will remain relatively low and stable.

We see the risks around our baseline on the downside. These include worries about the entrenchment and expansion of the U.S.-China dispute, as well as market turbulence related to the path of interest rate normalization by the U.S. Federal Reserve. Brexit and Italy's fiscal woes may have an impact, but remain regional risks for the most part.

All is not lost! Policymakers across the major economies can seize the opportunity to shed shibboleths and undertake bold (non-monetary) policy actions to mitigate the slowdown.

We expect the path of growth and policy normalization next year and beyond to be orderly for the most part; more an arrival of autumn than a coming of winter. This global slowdown is both necessary and healthy. It's not the beginning of another global financial crisis.

To advance this agenda, we also are leveraging the S&P Global Foundation to distribute grants to nonprofit partners committed to help women thrive in today’s economy.