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2019 is coming a close, and now as we turn towards next year, I present to you a list of 10 stock market predictions for 2020. You can review my list of top 10 predictions for previous years 2016, 2017, 2018, and 2019 to see how I did.
As I did last year, I will start with number 10 and work our way up to number 1 over the final month of 2019. Enjoy!
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Prediction Number 10: Global Growth Returns
All we heard about in 2019 was slowing global growth, trade wars, contacting manufacturing PMI’s, yield curve inversion, and of course, recession fears. That will not be the case in 2020.
The US never even got close to reaching recessionary levels in 2019, with GDP growing at 3.1% in 1Q, 2% in 2Q, and 2.1% in 3Q. Hey, even the fourth quarter suggesting a recession, with the Atlanta Fed GDPNow tracking at 1.7%. Making all those fears a giant waste of time. Even Germany never went into recession, it was close, but no recession.
Hey, but it got the Fed to hold off from raising rate, and even cutting them three times, as yields plunged.
Now, as 2019 draws to a close, there are signs that PMI’s are bottoming. Also, the global markets are acting as if global growth is about to come roaring back to life in 2020. The all-word ACWI ETF has moved back to its all-times and is on the cusp of breaking out.
Key export economy stock markets such as Germany have seen its DAX index climb back to its all-time highs.
Meanwhile, Japan has seen a significant recovery as well, and could soon reach levels not seen since the early 1990s.
Then, of course, there are vital semiconductors stocks such as Taiwan semi that have rocketed to all-time highs, breaking free of a nearly 2-year period of consolidation.
Of crouse, there is also the all-important S&P 500, which has rocketed to record levels.
Even 10-year yields have ticked higher off their lows in recent months, suggesting that perhaps the worse of the global slow down is behind us.
Meanwhile, that is allowing the US Yield curve to normalize and begin to steepen.
The market is sending a loud message, and it is telling me that prediction number 10 is a return to global growth in 2020.
-Mike
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.