Karen Ward

Chief Market Strategist EMEA

Ambrose Crofton

Global Market Strategist

     

The economic map for 2020 is far from clear. The early months of the year may see a small reprieve in manufacturing activity, but overall global growth is likely to remain constrained by geopolitical uncertainty.

Risk assets had an optimistic 2019, but stagnating earnings growth means valuations now look less supportive. Given pressure on margins, we struggle to see a significant reacceleration in earnings growth in 2020.

Central banks are likely to remain a key pillar of market support, given their demonstrated willingness to push deeper into uncharted policy territory to keep the expansion going.

Against this backdrop, we favour a regionally neutral, defensive equity allocation. Government bonds still have a role to play as insurance, despite low yields, but we believe investors should also consider other diversifiers, such as infrastructure and macro funds.

Given the binary nature of some of the political risks, investors may wish to consider some allocation to assets in emerging Asia that are likely to benefit if trade uncertainty resolves.

Inflation appears to be off the cards for now, but any resurgence would likely upset the price of both stocks and bonds, so real assets could provide a useful portfolio buffer.

We expect the focus on sustainability to continue to grow, with potential regulatory and policy responses having wide-ranging investment implications.


Key themes

The six issues likely to have the most impact on global investment for 2020 and beyond.

Where are we in the cycle?
 

Find out more ►

Valuation and margin headwinds
 

Find out more ►

How will the US election affect markets?

Find out more ►


Don’t fight the Fed (and the ECB, the BoJ, the BoE…)

Find out more ►

Portfolio construction: Balancing risks, building resilience

Find out more ►

An increased focus on sustainability
 

Find out more ►

Key themes from 2019

Take a look back at Karen's key themes from the middle of the year.

Will the trade war prove fatal for the global recovery?

Find out more ►

The Fed is off the brake, is it back on the accelerator?

Find out more ►

Beijing will do whatever it takes
 

Find out more ►


Trade war impact most acute in Europe

Find out more ►

The challenges of asset allocation in this cycle

Find out more ►

Seeking assets that provide shelter in a tail risk world

Find out more ►

 







The Market Insights program provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment decision-making, the program explores the implications of current economic data and changing market conditions. For the purposes of MiFID II, the JPM Market Insights and Portfolio Insights programs are marketing communications and are not in scope for any MiFID II / MiFIR requirements specifically related to investment research. Furthermore, the J.P. Morgan Asset Management Market Insights and Portfolio Insights programs, as non-independent research, have not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor are they subject to any prohibition on dealing ahead of the dissemination of investment research. This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own professional advisers, if any investment mentioned herein is believed to be suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not a reliable indicator of current and future results. J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our Company’s Privacy Policy (https://www.jpmorgan.com/global/privacy). For further information regarding our local privacy policies, please follow the respective links: Australia (https://www.jpmorganam.com.au/wps/portal/auec/PrivacyPolicy), EMEA (www.jpmorgan.com/emea-privacy-policy), Hong Kong (https://www.jpmorganam.com.hk/jpm/am/en/privacy-statement), Japan (https://www.jpmorganasset.co.jp/wps/portal/Policy/Privacy), Singapore (http://www.jpmorganam.com.sg/privacy) and Taiwan (https://www.jpmorgan.com/country/GB/en/privacy/taiwan). This communication is issued by the following entities: in the United Kingdom by JPMorgan Asset Management (UK) Limited, which is authorized and regulated by the Financial Conduct Authority; in other European jurisdictions by JPMorgan Asset Management (Europe) S.à r.l.; in Hong Kong by JF Asset Management Limited, or JPMorgan Funds (Asia) Limited, or JPMorgan Asset Management Real Assets (Asia) Limited; in Singapore by JPMorgan Asset Management (Singapore) Limited (Co. Reg. No. 197601586K), or JPMorgan Asset Management Real Assets (Singapore) Pte Ltd (Co. Reg. No. 201120355E); in Taiwan by JPMorgan Asset Management (Taiwan) Limited; in Japan by JPMorgan Asset Management (Japan) Limited which is a member of the Investment Trusts Association, Japan, the Japan Investment Advisers Association, Type II Financial Instruments Firms Association and the Japan Securities Dealers Association and is regulated by the Financial Services Agency (registration number “Kanto Local Finance Bureau (Financial Instruments Firm) No. 330”); in Australia to wholesale clients only as defined in section 761A and 761G of the Corporations Act 2001 (Cth) by JPMorgan Asset Management (Australia) Limited (ABN 55143832080) (AFSL 376919); in Brazil by Banco J.P. Morgan S.A.; in Canada for institutional clients’ use only by JPMorgan Asset Management (Canada) Inc., and in the United States by JPMorgan Distribution Services Inc. and J.P. Morgan Institutional Investments, Inc., both members of FINRA; and J.P. Morgan Investment Management Inc.
In APAC, distribution is for Hong Kong, Taiwan, Japan and Singapore. For all other countries in APAC, to intended recipients only.
Copyright 2019 JPMorgan Chase & Co. All rights reserved.
All illustrations are property of JPMorgan Chase & Co. unless otherwise stated.


LV–JPM52449 | 12/19 | EU | 0903c02a8276bb04