Global Investment Outlook: Coping with a Changing Market Landscape in 2020
Our senior investment leaders have a cautiously optimistic outlook for 2020. They still do not see a global recession looming and believe there are plenty of reasons to remain invested. In our latest “Talking Markets” podcast, Franklin Templeton Fixed Income Group CIO Sonal Desai, Franklin Templeton Multi-Asset Solutions CIO Ed Perks and our Head of Equities Stephen Dover share their outlook.
Some highlights of their views:
- Sonal Desai: I’m not anticipating growth is going to skyrocket in 2020, but on the other hand, I am not seeing indications from a growth perspective that would cause me a great deal of concern.
- Ed Perks: Certainly there are areas around the globe that are more vulnerable, but we would say the global economy is really experiencing more of a slowdown and not something that we think turns into a full blown global economic recession. Unfortunately, however, a lot of the uncertainty that has presented a challenge to markets, whether it be trade policy or geopolitics, is likely to remain with us for quite some time.
- Stephen Dover: When people are looking at risk, I think they have to look both at upside risk and downside risk. Over the last 10 years, not being in the market has been a risk because of the upside opportunities in equities. Going forward, we see a lot of opportunity in foreign markets, including China and some specific emerging markets where changes in trade are favorable.
Host/Kristine Hurley: Hello and welcome to Talking Markets: exclusive and unique insights from Franklin Templeton.
I’m your host, Kristine Hurley.
Ahead on this episode: our latest Global Investment Outlook breaks down a changing market landscape in 2020. And while there are a number of uncertainties causing concern, investors also have reason to be optimistic.
Joining us is Stephen Dover, Head of Equities, Ed Perks, Chief Investment Officer, Franklin Templeton Multi-Asset Solutions and Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income Group.
Kristine Hurley: Sonal, let’s start with you and your thoughts on global growth in 2020?
Sonal Desai: You know, if I think about global growth going into 2020, the thing that I find most remarkable is the quantity of focus on the idea that something dramatic is happening globally on the growth front and the truth of the matter is it isn’t. There’s no drama in the sense that I’m not anticipating that growth is going to skyrocket in 2020. But on the other hand, I am not seeing indications that would cause me a great deal of concern on the growth perspective. Now if we’re talking about markets, that’s a slightly different issue, but from a growth perspective, I actually feel there’s not very much to see.
So for the US, for example, I could see GDP [gross domestic product] growth anywhere from 2-2.5%, even 2.75% because we’re looking at very easy fiscal policy, continued easy monetary policy. If I look instead at Europe, Europe has slowed. Europe has slowed substantially, but I think the key issue here is it has slowed to potential, not below potential. So again, globally, the growth picture does not look remarkable—remarkably bad or remarkably good. It essentially looks at potential.