Global Investment Outlook: November 2019

Recession Fears, Two Tier Markets and the 'Whack-a-Mole' power of a Tweet!

As the Fed cuts rates for the third time, and now potentially goes 'on pause', flagging economic data and corporate results begin to show the impact of US - China trade tensions. Going forward, the 'R' word (recession) pops up, then like 'Whack-a-Mole', gets beaten down again when any 'progress' seems to be being made in trade discussions. The UK faces a General Election before Christmas and Saudi Arabia is trying to get the world's biggest IPO away. Uncertainty abounds, though the countdown to the US Presidential election may help focus minds on getting a trade deal done.

Markets continue to climb the 'Wall of Worry', helped perhaps, by the reassertion of a steepening yield curve. However, many of this month's papers are quick to outline potential risks. Opinions are divided, with some asset allocators suggesting that equity weightings ought to be trimmed, while others think risks are asymmetrical, and that further upside remains.

Q4 2019 Capital Markets View (MFS IM)

MFS presents their Q4 2019 Capital Markets View, in which they compare multiples for equity markets, favour European investment grade bonds over US ones, and outline the risk and opportunities present in EM Fixed Interest.

Global Investment Views (Amundi AM, Nov 2019)

(For compliance reasons, this paper is not accessible in the United States)

Amundi’s Global Investment Views paper suggests that investors need to stay agile in a highly uncertain environment.

Outlook 2020: A Tale of Two Scenarios (Robeco, Nov 2019)

Robeco’s insightful annual outlook investigates two potential scenarios for the economy and markets; one in which investors can ride the coattails of relative valuation, company earnings and continued economic expansion for a little longer, or another where both GDP growth and earnings stall.

Monthly Market Monitor (Eaton Vance, Nov 2019)

Eaton Vance offers, in their Monthly Market monitor, a review of economic and asset class data, presented in a concise and impactful style.

Capital Markets Outlook, 4Q 2019 (AB)

(For compliance reasons, this paper is only accessible in Certain Geographies)

Alliance Bernstein presents their views for portfolio positioning as risks to the global economy increase.

Fundamental Equities Outlook Q4 2019: The brand-new pinball style (Robeco)

In their Q4 Equity Outlook, Robeco notes that markets seem to be almost entirely directed by President Trump’s Twitter feed. With a binary outcome on trade talks, they are circumspect in taking a significant position in either Developed or Emerging Markets equities, but note that the risk-reward ratio is asymmetric, with several equity market valuations appearing attractive.

Multi Asset Monthly: nearing the top of the wall of worries? (NN IP, Nov 2019)

NN Investment Partners presents their Monthly Asset Monthly in which they outline their views on the economic outlook and asset allocation across a range of asset classes.

Global Macro Trends: Wisdom in Curiosity (KKR, Oct 2019)

KKR’s 28 page report looks at various aspects of the global economy, including the impact of negative interest rates and the validity of risk-adjusted returns in private markets.

Investors’ Outlook: Treats not Tricks (Vontobel AM, Nov 2019)

Vontobel’s Outlook paper investigates some of the potential pitfalls and opportunities that exist across asset markets.

Fixed Income Quarterly Report, Q4 2019 (Hermes IM)

The Fixed Income team at Hermes provides their Quarterly outlook paper, in which they investigate the risks and opportunities that exist across the credit spectrum.

High Yield: Deep diving needed due to more uncertain outlook (Amundi AM, 2019)

(For compliance reasons, this paper is not accessible in the United States)

Amundi’s Investment Insights paper takes a deep dive into the global High Yield market, finding that generally, it has been relatively robust so far this year but one needs to be careful.

In a low-yield environment, income is key (Capital Group, Oct 2019)

(For compliance reasons, this paper is only accessible in Certain Geographies)

In a low interest rate, potentially more volatile world, Capital Group highlights some of the more established income opportunities in both Developed and Emerging Markets that offer 'resilience' characteristics.

Quarterly Global Fixed Income Outlook ( Putnam Oct 2019)

Putnam Investments presents their Quarterly analysis and outlook of global bond markets.

Alternative Industry and Technology Outlook Survey (State Street, 2019)

State Street identifies, in this report, the key takeaways from a survey of 200 alternative asset managers. The focus is on the potential implications for the alternative managers’ business models and strategies and what impact this may have with investor relationships.

Global Limited Partners' Survey: focus on EM private equity (EMPEA, 2019)

EMPEA’s 15th Global Limited Partners Survey draws insights from the opinions expressed by 104 limited partners (LPs) on current conditions in, and the outlook for, Emerging Market private equity.

2020 Commercial Real Estate Outlook (Deloitte)

In Deloitte’s Outlook for 2020 featuring the Commercial Real Estate (CRE) market, they surveyed 750 industry professionals, brokers, analysts and investors in 10 countries to help gauge what effect emerging technologies and analytics are likely to affect the decision-making process in future, resulting in a better experience for tenants.

Income Strategy Playbook 4Q 2019 (Invesco US)

(For compliance reasons, this paper is only accessible in the United States)

Invesco presents their 53-page Income Strategy powerpoint presentation, which covers both credit markets and dividend paying equities and offers analysis on current economic prospects.

Investment Outlook, Autumn Update (Irish Life IM, Oct 2019)

Irish Life IM's Quarterly Outlook draws upon the views of its senior professionals who look back at some of the major investment themes that have impacted asset markets during 2019, and then explore likely drivers of markets in 2020.

Q4 2019 Global Market Outlook: The art of the no-deal (Russell Investments)

Russell Investments' Q4 Outlook paper investigates the prospects of a trade deal being achieved between China and the US with a looming presidential election and considers the negative impacts that trade tensions may already have had, with global recession risks now rising.

Webinar: Europe Outlook - Cloud of Uncertainty (Moody's, Oct 2019)

Moody’s webinar discusses the prospects for recession, identifying leading indicators, its potential length, timing and potential severity.

ABOUT THE AUTHOR

Andrew Perrins is a former Actuary and Asset Allocator. After qualifying as an Actuary, he worked for 15 years in investment management, serving as Director of Asset Allocation for Abbey Life and for Chase Manhattan, before setting out on a more entrepreneurial path.

To contact him, email [email protected]