BlackRock’s global outlook for year 2020

BlackRock, a leading global investment management corporation, has released its global outlook for the year 2020. The report suggests that growth is expected to edge higher in the upcoming year, which should help limit recession risks. According to Karim Chedid, Investment Strategist for ETFs and Index Investments at BlackRock, one of the key themes that will shape the market outlook for the first quarter of 2020 is the stabilization of data, particularly in manufacturing and trade sectors. After a period of gloomy growth outlook in 2019, marked by bond yield re-pricing and other indicators, signs of stabilization are emerging, hinting at a modest rebound in growth in Q1, 2020, which could benefit risk assets. Chedid also emphasizes the potential for a pause or an agreement in the US-China relations. While a comprehensive deal is not expected, a phased approach with a possible halt in tariff hikes or reduction in tariffs could contribute to a more stable relationship between the two economic giants. Furthermore, the report suggests that on the policy front, central banks are likely to maintain a pause in monetary policies. With actions from the European Central Bank and the Federal Reserve indicating a monitoring phase, central banks are evaluating the impact of their recent easing measures on the economy, considering factors such as inflation and labor market data. The importance of diversification remains paramount in the late cycle environment. Despite the projected modest growth rebound, focusing on resilience and diversification through holdings in precious metals and alternative investments is deemed crucial. Chedid also highlights the potential opportunities in emerging markets for 2020, as these markets are expected to benefit from the benign environment, potential trade calming, and the projected growth uptick, presenting opportunities for catch-up. The year 2019 witnessed a strong performance in developed market equities, especially in the US, outperforming emerging market equities. However, the tide is expected to turn in 2020, with a more favorable outlook for emerging markets. With central banks staying on hold and a potential easing of trade tensions, emerging markets are poised to make gains and narrow the performance gap. In conclusion, BlackRock's global outlook for the year 2020 paints a moderately positive picture for growth, with a focus on stabilization, policy pauses, diversification, and emerging market opportunities. Investors are advised to remain vigilant, stay diversified, and consider the evolving landscape of global markets for potential investment strategies.