Lower growth of the global economy in 2020: what about the stock market?
Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics and Global Head Fixed income in the Global Investment Center of the Private Bank of ABN AMRO, gives a forecast of the upcoming investment year.
In 2019, the stock prices fluctuated mainly because of news about the trade war and the Brexit. This influence will diminish in 2020, according to investment professionals. Lower economic growth will affect the stock market to some extent, but fear of recession is exaggerated according to experts.
According to Pieterse-Bloem, bonds will be less attractive in 2020. Bonds yielded a price gain in the past year but this is not expected for 2020: 'Due to the negative returns on various types of bonds, this asset class is currently less interesting for our clients. In 2019, bonds yielded a price gain, which is not expected for 2020, rather a normalisation of interest rates later in the year. Higher interest rates mean lower prices. That is why we are currently underweighing bonds.’