2020 Global Market Outlook

Central bank easing and the cooling China-U.S. trade war have set the scene for a global economic rebound in 2020. Our forecast pushes the risk of recession into late 2021, giving equity markets modest upside potential for 2020.

We believe economic growth, along with the Bank of Canada’s (BoC) patience, will be tested in 2020. We also expect business investment to be tepid, due to both global and domestic issues. However, Canadian shares could benefit if the global economy reflates, supporting cyclicals.

Key Market Themes

Hold the epitaphs—this aging cycle seems likely to last beyond 2020. Central bank easing, the de-escalation in the trade war and tentative green shoots in global manufacturing suggest we might be on the cusp of another mini-cycle recovery through the first half of 2020.

We believe that both China and the U.S. have incentives to reach a phase one deal on trade soon. U.S. President Donald Trump would like to declare victory in the trade war ahead of his 2020 re-election bid. Chinese President Xi Jinping, on the other hand, would like to limit the risk of a further trade shock as he strives to balance the short-term requirement for economic stimulus against a medium-term need to reduce debt levels in the Chinese economy.

Read the just-released 2020 Global Market Outlook with our strategists’ market expectations for the year ahead.

https://docs.google.com/viewerng/viewer?url=https://mywealthmanagement.ca/wp-content/uploads/2020-Russell-Investments-GMO-MLD.pdf