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Capital Market Outlook

December 9, 2019

IN THIS ISSUE

  • Macro Strategy—A fundamental change in the Federal Reserve’s (Fed's) approach to achieving its inflation target means monetary policy is shifting from a headwind to a tailwind in 2020. The pattern of the U.S. business expansion over the past 10 years shares many similarities to the previous longest expansion in the 1990s. Like that episode, we believe the end-phase before the next recession could include a run-up in equity values way beyond historical norms.
  • Global Market View—As we head into 2020, the world is undergoing profound macro and thematic changes. Especially during times of episodic volatility, we suggest gaining exposure to these ten global themes set to evolve as we head into the next decade.
  • Thought of the Week—With the U.S. manufacturing sector still in contraction territory, the U.S. consumer has continued to drive economic growth. Strong retail sales data from the Thanksgiving weekend confirms the trend, with mobile commerce, millennials and multichannel strategies driving sales growth this holiday season. Holiday sales growth and 4Q S&P 500 performance have historically been highly correlated.

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