2020 MACRO OUTLOOK

Repression, Introspection, Election

 

2019 was a blockbuster year for financial returns, as equity markets climbed a wall of worry – exactly like in 2016. But 2020 will not be a repeat of 2017, if only because the economic upturn will be much softer this time around.

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.

REPRESSION, INTROSPECTION, ELECTION

2020 Outlook by Vincent Chaigneau,
Head of Research

RELATED INSIGHTS

CHINA’S Q4 GDP GROWTH SURPRISED ON THE UPSIDE, BUT RISKS TO THE OUTLOOK HAVE INCREASED
This morning, China published its Q4 GDP growth alongside with December monthly activity data. Q4 growth accelerated to 6.5% yoy which lifted total 2020 GDP to 2.3%. December real activity data were more mixed. While exports came in strongly, important domestic demand components were a bit unsteady.
COVID-19 FACTS & FIGURES
US President-elect Joe Biden has unveiled a $1.9 trillion stimulus package proposal. Following the recent increase in cases, China has imposed new restrictions and lockdowns in the Hebei province. Canada has implemented new restrictions and a provincewide curfew in Quebec that will last until February 8. German Chancellor Angela Merkel warned that the recent rise in Covid-19 cases could force the country to prolong the nationwide lockdown until April.
EQUITIES: STAY POSITIVE WITH A VALUE-CYCLICAL TILT
Following a monster rally in stocks last autumn, multiples are well above historical averages, but equity investors can count on lingering low yields, tighter credit spreads and increasing central banks’ balance sheets which in turn maintain low the cost of equity and the discount rate of future cash flows.

*Generali Insurance Asset Management S.p.A. Società di gestione del risparmio is part of Generali Investments multi-boutique platform