Expect 2020 to be a Great Year in the Markets

Matthew Unger |

While we have not published our full 2020 Outlook & Forecast, there are many reasons to believe that 2020 will be a good-to-great year in the markets. While after a year of top percentile growth in the markets, we don't expect this to continue into 2020.

While we are not forecasting a recession or a bear market, we urge investors to expect heightened volatility in the months to come, and not to deviate from their current plans and strategies. We don't see the Fed raising rates in 2020. 

It would be necessary to remain neutral in our opinion since current 2-yr Annualized GDP is around 4% and the Fed Funds Rate is at 1.5%. Said differently, we expect The Fed to begin raising rates likely in 2021 to continue to control higher inflation and stronger growth.

We expect the US unemployment rate to remain low as we continue into this record-breaking, growth-fueled economic expansion; perhaps a slight uptick in January numbers due to seasonal jobs coming to an end in December, but we believe this already to be priced into the market.

Early-stage consumable inventories are very low and some analysts expect a rebound...restocking will be very bullish for cyclicals.

Stay tuned for our full forecast in January. Happy New Year!

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Focus Asset Management to provide information on a topic that may be of interest. Copyright 2020 Focus Asset Management.

TIMESTAMP: 27 December 2019 5:00PM EST