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What's going on?

One of the worlds largest investment banks revealed its predictions for 2020 on Thursday and it sees smooth sailing ahead.

What does this mean?

JPMorgan is recommending its clients buy stocks and steer clear of bonds in 2020. The investment bank expects this year’s global economic slowdown to turn around and gather momentum in the next driven both by improving global manufacturing and a strong US labor market which is lowering the risk of a recession in the country.


But corporate America doesnt seem to agree. A study released on Wednesday showed more than half the US companies surveyed are expecting a recession in 2020 and bracing for it by cutting costs, paying off debt, and hoarding cash. Still, now the US presidents announced a trade deal is close, those companies which have borne the brunt of a prolonged US-China trade war might have a change of heart

Why should I care?

For you personally: Whats the big idea?


JPMorgan is particularly keen on German and emerging market stocks for 2020, as well as those of Japanese banks. The firm, meanwhile, is advising clients to avoid bonds (particularly riskier but higher-yielding ones) and even going as far as to recommend a bet that the price of gold will fall. The biggest risk in 2020, JPMorgan reckons, is the US presidential election particularly if a successful Democratic Party nominee enforces policies painful to US businesses, like extra regulation and higher taxes.



The bigger picture: A new decade awaits.


2020 is one thing, but the 2020s are quite another and analysts arent as optimistic about the decade as a whole. With global stock valuations sky-high and bond yields hovering near record lows, investment banks are expecting a classic investor portfolio of stocks and bonds to offer abnormally weak returns.

Originally posted as part of the Finimize daily email.

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