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Citigroup says that there will be growth next year, suggesting that investors should be a bit more open to increasing their portfolios.
As 2019 draws to a close, many analysts and other players in all of the world’s different markets, are taking a hard look at the last eleven months and trying to make a forecast for 2020. All the ups and downs with stocks and investments that have happened in one year are usually used as base points to form a prediction for the following year. While things have not been exactly terrible in 2019, American multinational investment bank and financial services giant Citigroup Inc. has predicted a better-than-expected market for 2020.
In a recently published outlook report titled “Staying Positive in a Negative (Yielding) World”, the company believes that there will be increased growth in 2020. The report reads:
“Citi Private Bank is confident that 2020 will be brighter than many expect. We believe that global growth will surprise positively, feeding through into modest corporate earnings growth.”
While there are still many who believe that the threat of an economic recession is very real and somewhat inevitable, Citi Private Bank does not agree. According to the bank’s chief investment officer David Bailin, the events that have trailed 2019’s politics and trade atmosphere has caused a lot of discomfort among clients and is slowly spreading. However, Bailin says that “when you look at the economy you see facts are completely different than that.”
Citi’s forecast says that there will be an increase in expansion as well as corporate earnings all over the world from next year. It suggests that all things being equal, especially if things don’t get any worse than the status quo, the increase will hit 7% and probably soar higher. The bank also puts equity returns for many of the world’s markets up to 7% as well.
Speaking about the increase, Bailin says that there was a general expectation that there would be a severe crash in the manufacturing sector. Recent reports show that manufacturing indexes did drop, but according to Bailin, there was still recorded expansion. He believes:
“Manufacturers both for consumer goods and industrial goods were expecting a downturn that never happened. Between the consumer staying strong and the Federal Reserve and other central banks being accommodative, there was success in extending an already-long expansion.”
Generally, Bailin hopes that the report will do a lot to encourage people who might already be downcast about the future of the economy at least for next year.
Furthermore, Citi has called for the entire market and all of its players to not just have a positive outlook towards 2020, but to also pay attention to “unstoppable trends” which are not only transforming lives and businesses but also “creating long-term opportunities for your portfolio.” The report mentions specific trends including cybersecurity, fintech and the future of energy.
The report also puts a fine print on the Asian market, predicting growth of between 5% and 5.5% in 2020. Specifically mentioning China, the report says that Chinese earnings per share growth should hit 12% next year.