At SunTrust, now Truist, we’re committed to uncovering and analyzing long-term trends and near-term influences that create investment opportunities for our clients.
After stellar gains across the capital markets during the past year, we expect the global economy and markets to take two steps forward in 2020 as stimulus measures lead to firming global growth, but policy uncertainty will cause markets to periodically take a step back.
Against this backdrop, we focus on three main themes.
1. Economy: Modest Growth Uptick
Global growth should increase, driven by the lagged effect of aggressive monetary stimulus measures and easing geopolitical tensions. We anticipate steady growth in the US of around 2.3% as the resilient consumer continues to carry the economy forward. Growth in international developed markets is expected to stabilize, while activity in the emerging markets should see a slight pickup.
2. Equities: Glass Half Full
Following the strong gains seen in 2019, we anticipate more average-like stock returns in 2020. Stocks should be well supported by a modest global recovery, accommodative monetary policy and improved earnings trends. However, this improved backdrop is already partially reflected in equity prices. Stocks still remain attractive on a relative basis and should be among the better performing asset classes.
3. Fixed Income: Push and Pull
We expect fixed income returns in 2020 to be more muted after the stellar returns of 2019. US rates should gyrate given the push of firming global growth and easing geopolitical tensions against the pull of low inflation, aging demographics and the strong demand for yield and safe-haven assets. We anticipate opportunities to lengthen portfolio duration closer to neutral as rates rise.