Outlook 2020

REPRESSION, INTROSPECTION, ELECTION

 

In this video, Vincent Chaigneau, Head of Research at Generali Insurance Asset Management, shares his view on next year’s key defining macro themes and financial outlook.

Highlights:

  • Global growth is finding its feet, but a powerful upswing is not around the corner: risks such a Hard Brexit
    (still!) and the US elections are impediments to a meaningful capex recovery.
  • 2019 was in many ways similar to 2016; but 2020 will not be a repeat of 2017. We expect equity gains to continue, but in a far more muted fashion.
  • Central banks engineered a stunning risk rally in 2019; they will be less active in 2020. But nascent efforts to make inflation targets more symmetrical will remain a risk-friendly force.
  • Equities are still cheap relative to bonds: the gap between earnings and bond yields is somewhat irresistible.
    At this level of outright valuation, however, the drawdown risk increases; timely hedging will be a focus in
    2020.a
  • Avoid ‘risk-free’ bonds, but in that space prefer Treasuries as a hedging instrument. Credit continues to offer superior risk-adjusted returns. Expect the USD pullback initiated in Q4 2019 to continue (good for EM).

Watch the Video:

MACRO OUTLOOK 2020

Find out market trends and investment perspectives by our Research team, led by Vincent Chaigneau.