Last January, Bob Doll, Chief Equity Strategist at Nuveen made his 10 predictions for 2020 saying that after 2019 was a tough year to forecast (though he was mostly right, getting eight out of 10 correct) in 2020, the theme was “Uncertainties diminish, but markets struggle.” However, the coronavirus pandemic and resulting economic and market upheaval have since changed everything.
“In early March, consensus expectations for 2020 global GDP growth were +3%. Now they are -3%.1 A 6% swing would be unusual over a three-year time period. We just saw one in a month. We’re going to continue keeping track of (and scoring) our original predictions through the rest of 2020, but in the interest of providing investors with an updated and more relevant perspective, we’re also offering a mostly new list that speaks to what investors might expect from here.: Doll mentions.
In general, “the views for the rest of the year are predicated on our expectation that the coronavirus pandemic will peak in the second quarter, paving the way for a slow economic recovery in the second half of the year. We also think the massive policy stimulus should aid the recovery.”
Bob Doll’s (Mostly New) Ten Predictions for 2020 are:
- The U.S. and world experience a sharp, but reasonably short recession with noticeable recovery before year-end.
- All-time low yields move higher during the second half, with the 10-year Treasury closing the year above 1%.
- Earnings collapse, but rise smartly by the fourth quarter.
- Stocks, bonds and cash all return less than 5% for only the fourth time in 25 years.
- The dollar weakens as global growth strengthens in the second half.
- Value and cyclicals outperform growth and defensive stocks in the second half.
- Financials, technology and health care outperform utilities, energy and materials in the second half.
- Active equity managers outperform their indexes for the first time in a decade.
- The cold wars within the U.S. and between the U.S. and China continue.
- The coronavirus recession and rise in unemployment cause Donald Trump to be a one-term president.
For the full version of Bob Doll’s (Mostly New) Ten Predictions for 2020 follow this link.
Por Funds Society, Madrid