Investment Insights: Market Commentary - January 2020
The 2019 college and NFL football seasons brought quite a few interesting match-ups to intrigue sports fans.
Tiger vs Tiger: The 2019 national champion Clemson Tigers took on the LSU Tigers and the unmatched play of its quarterback and Heisman Trophy winner Joe Burrow.
Experience vs. Youth: With New England Patriots’ Tom Brady out in the wild card round of playoffs, it was up to Green Bay’s veteran quarterback, Aaron Rodgers (age 36) to potentially face the younger quarterbacks of Tennessee, San Francisco, and Kansas City.
On an economic and investment markets front, we have witnessed and endured many face-offs in recent times and new ones are upon us. While the age-old question of whether the U.S. will encounter a recession still lingers, there are many issues favorably lining up for global economies and markets.
A SUMMARY OF WHAT'S INSIDE
- There have been many face-offs in the economic arena, however many forces are aligned and economic activity is netting positives.
- A face-off between the monetary policies of central banks vs. the fiscal policies of governments, in aggregate, are now aligned and supporting economies and markets.
- Domestic monetary policies have flooded the zone with a large increase in liquidity, which seems a support to markets.
- Trade policies have damaged global economic growth and manufacturing, specifically. However, a look at a domestic manufacturing contraction vs. consumer spending highlights the tale of two sub-economies. The U.S. consumer has carried the economy.
- Old geo-political risks have diminished. However, new geo-political face-offs including U.S. and Iranian military escalations have us on watch - especially oil and energy prices.
- Historical impeachments have not impacted markets as many think. We take a closer look.
- Global fundamentals appear aligned, but valuations are uneven. This has investment implications. Sentiment has been improving, but is always subject to change.
- Performance for 2019 was impressive. However, as we enter 2020, expect lower returns and more volatility!
- Portfolio Implications – There are so many moving pieces. We read between the lines of news events and provide implications and recommendations regarding how portfolios should be positioned.
Read more about these topics along with recap of the markets and what may be in store as we head into 2020.