2020 Investment Outlook
2019 saw some significant events that reinforced the trend in place since 2009 and increased anxiety that the end is near yet confirmed the market’s ability to climb a wall of worry. Here’s a look at several of those key events:
- The Federal Reserve (Fed) pivoted from hawkish in 2018 to dovish in 2019. The Federal Open Market Committee (FOMC) cut the Fed Funds Rate by 75 basis points (bps) with potentially another one in the cards.
- The 10- and 2-year yield curves inverted for roughly 40 days in August through October, which amplified the recessionary calls.
- Earnings per share (EPS) in the United States went from historically above-average gains to negative year-over-year in the third quarter.
- After a record high number of asset and debt classes generated a negative total return in 2018 (since 1901), the global markets are on pace to record a historic low number of asset classes with negative total returns in 2019.
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The charts/graphs included in this publication do not reflect past or current recommendations made by AAM, should be considered an academic treatment of empirical data and should not be used to predict security prices or market levels. Any suggestion of cause and effect or of the predictability of economic cycles or investment cycles is unintentional. AAM’s Investment Outlook was written using empirical research and analysis by highly experienced market observers and is designed for educational purposes only. This publication should only be considered as a tool in any broker’s, dealer’s or advisor’s investment decision matrix. Investors should consult their financial advisor when applying the assumptions in this publication.
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