Emerging markets equities are starting off 2018 strong, climbing higher yesterday and “extending strong gains from 2017 that were driven by the strength of the world economy and expectations for mild tightening in monetary policy by central banks in the developed world,” the Financial Times says. Having had such a strong 2017, emerging market equities are expected to remain on a steady upward trend, with some analysts even seeing them growing even further this year than last. “Companies have reduced wasteful investments, and our math finds free-cash-flow yield for non-financials exceeds that of DMs for the first time since 2007. Return on equity is finally improving and valuations are rising,” BlackRock’s global chief investment strategist, Richard Turnill, said.

…If you had any optimism for 2018, Eurasia Group wants you to forget it. “Yes, markets are soaring and the economy isn’t bad, but citizens are divided. Governments aren’t doing much governing. And the global order is unraveling. The scale of the world’s political challenges is daunting. Liberal democracies have less legitimacy than at any time since World War II, and most of their structural problems don’t appear fixable. Today’s strongest leaders show little interest in civil society or common values,” Eurasia says in its annual forecast of the world’s political risks. Trying to knock off the world’s collective NYE hats off, Eurasia says “if we had to pick one year for a big unexpected crisis—the geopolitical equivalent of the 2008 financial meltdown—it feels like 2018. Sorry.”

The report lists the top ten risks of the year, which include China’s appetite for operating in a “vacuum,” the potential for any misstep or misjudgment to provoke serious international conflict, the global cold war in tech, the erosion of institutions in the developed world, and the rise of protectionism. The report is available in full here or you can watch Eurasia’s President Ian Bremmer discuss the risks for 2018 with group Chairman Cliff Kupchan (runtime 10:00).