Macro | Signs of stabilization
| GDP growth (in %, year-on-year) | 2019F | 2020F | |
|---|---|---|---|
| United States | 2.2 | 1.6 | |
| Eurozone | 1.1 | 0.9 | |
| United Kingdom | 1.2 | 1.3 | |
| Japan | 0.8 | 0.2 | |
| China | 6.2 | 5.8 | |
| World | 3.1 | 3.1 |
| Fiscal deficit (in % of GDP) | 2019F | 2020F | |
|---|---|---|---|
| United States | 4.4 | 4.6 | |
| Eurozone | 1.1 | 1.1 | |
| United Kingdom | 2.2 | 2.4 | |
| Japan | 3.2 | 2.3 | |
| China | 4.8 | 4.2 |
| Consumer price inflation (in %, year-on-year) | 2019F | 2020F | |
|---|---|---|---|
| United States[1] | 1.9 | 1.9 | |
| Eurozone | 1.3 | 1.3 | |
| United Kingdom | 1.9 | 2.0 | |
| Japan | 0.8 | 1.4 | |
| China | 2.4 | 2.5 |
| Current-account balance (in % of GDP) | 2019F | 2020F | |
|---|---|---|---|
| United States | -2.5 | -2.6 | |
| Eurozone | 3.3 | 3.2 | |
| United Kingdom | -4.3 | -4.2 | |
| Japan | 3.2 | 3.4 | |
| China | 0.2 | 0.1 |
| Benchmark rates (in %) | Current[2] | Dec 20F | |
|---|---|---|---|
| United States | 1.50-1.75 | 1.50-1.75 | |
| Eurozone | 0.00 | 0.00 | |
| United Kingdom | 0.75 | 0.75 | |
| Japan | 0.00 | 0.00 | |
| China | 4.35 | 4.10 |
| Commodities (in dollars) | Current[2] | Dec 20F | |
|---|---|---|---|
| Crude oil (WTI) | 56.8 | 54 | |
| Gold | 1,471 | 1,575 | |
| Copper (LME) | 5,812 | 6,240 |
Equity | Earnings rebound ahead
| Current[3] | Dec 2020F Forecast | Total Return (exp.)[4] | Expected earnings growth | P/E impact | Dividend yield | ||
|---|---|---|---|---|---|---|---|
|
United States (S&P 500) |
3,191 | 3,300 | 5.3% | 6% | -3% | 1.9% | |
|
Europe |
418 | 420 | 4.1% | 6% | -5% | 3.5% | |
|
Eurozone |
3,773 | 3,770 | 3.4% | 7% | -7% | 3.5% | |
|
Germany (DAX)[5] |
13,408 | 14,000 | 4.4% | 10% | -9% | 3.0% | |
|
United Kingdom (FTSE 100) |
7,519 | 7,500 | 4.5% | 2% | -2% | 4.7% | |
|
Switzerland |
10,542 | 10,450 | 2.3% | 5% | -6% | 3.2% | |
|
Japan |
1,047 | 1,060 | 3.7% | 4% | -2% | 2.5% | |
|
(USD) |
1,088 | 1,120 | 5.8% | 9% | -6% | 2.9% | |
|
(USD) |
674 | 700 | 6.4% | 9% | -5% | 2.5% |
Fixed Income | Yields range bound
| Current[2] | Dec 2020F | ||
|---|---|---|---|
|
United States |
|||
| U.S. Treasuries (10-year) | 1.82% | 1.85% | |
| U.S. municipal bonds[6] | 87% | 80% | |
| U.S. investment-grade corporates | 102 bp | 110 bp | |
| U.S. high-yield corporates | 382 bp | 400 bp | |
| Securitized: mortgage-backed securities[7] | 48 bp | 47 bp | |
| Europe | |||
| German Bunds (10-year) | -0.35% | -0.35% | |
| UK Gilts (10-year) | 0.71% | 0.95% | |
| Euro investment-grade corporates[8] | 112 bp | 90 bp | |
| Euro high-yield corporates[8] | 374 bp | 360 bp | |
| Securitized: covered bonds[8] | 43 bp | 40 bp | |
| Italy (10-year)[8] | 168 bp | 150 bp | |
| Asia-Pacific | |||
| Japanese government bonds (10-year) | -0.07% | -0.10% | |
| Asia credit | 265 bp | 265 bp | |
| Global | |||
| Emerging-market sovereigns | 323 bp | 320 bp | |
| Emerging-market credit | 326 bp | 320 bp |
Legend:
- Macro data exchange rates and alternative investments: The arrows signal whether we expect to see an upward trend , a sideways trend or a downward trend .
- The signals' colors illustrate the return opportunities for long-only investors: positive return potential for long-only investors. limited returnopportunity as well as downside risk. negative return potential for long-only investors.
Performance over the past 5 years (12-month periods)
| 10/14 - 10/15 | 10/15 - 10/16 | 10/16 - 10/17 | 10/17 - 10/18 | 10/18 - 10/19 | |
|---|---|---|---|---|---|
| Asia credit | 3.4% | 7.8% | 3.4% | -2.5% | 12.6% |
| Dax | 16.3% | -1.7% | 24.0% | -13.5% | 12.4% |
| Emerging-market sovereigns | -0.5% | 11.6% | 5.9% | -5.3% | 13.7% |
| Emerging-markets credit | 0.0% | 9.9% | 6.5% | -1.9% | 13.0% |
| Euro high-yield corporates | 2.9% | 7.1% | 7.8% | -1.3% | 5.2% |
| Euro investment-grade corporates | 0.4% | 5.1% | 2.3% | -1.2% | 6.1% |
| Euro securitized: covered bonds | 1.3% | 2.7% | -0.1% | -0.2% | 3.8% |
| Euro Stoxx 50 | 12.6% | -8.0% | 23.3% | -10.6% | 15.9% |
| FTSE 100 | 0.8% | 13.8% | 12.1% | -0.9% | 6.4% |
| German Bunds (10-year) | 3.7% | 3.8% | -0.3% | 0.8% | 6.2% |
| Italy (10-year) | 8.0% | 1.9% | 1.9% | -8.3% | 22.3% |
| Japanese government bonds (10-year) | 2.0% | 3.0% | -0.8% | 0.0% | 2.5% |
| MSCI AC Asia ex Japan Index | -7.2% | 6.6% | 30.4% | -13.6% | 13.2% |
| MSCI Emerging Market Index | -14.5% | 9.3% | 26.5% | -12.5% | 11.9% |
| MSCI Japan Index | 9.1% | 3.2% | 17.8% | -3.6% | 9.2% |
| S&P 500 | 5.2% | 4.5% | 23.6% | 7.3% | 14.3% |
| Stoxx Europe 600 | 15.0% | -6.5% | 20.4% | -5.4% | 13.9% |
| Swiss Market Index | 4.2% | -9.2% | 22.0% | 1.0% | 17.1% |
| U.S. high-yield corporates | -1.9% | 10.1% | 8.9% | 1.0% | 8.4% |
| U.S. investment-grade corporates | 0.9% | 6.9% | 3.2% | -2.8% | 14.9% |
| U.S. securitized: mortgage-backed securities | 2.5% | 3.3% | 0.5% | -1.5% | 8.9% |
| U.S. Treasuries (10-years) | 3.9% | 4.6% | -1.8% | -3.2% | 14.6% |
| UK Gilts (10-years) | 4.5% | 7.2% | 1.1% | 1.2% | 7.9% |
Source: Bloomberg Finance L.P. as of 10/31/19
Past performance is not indicative of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect.
1 . core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures)
2 . Source: Bloomberg Finance L.P. as of 11/14/19
3 . Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 12/16/19
4 . Expected total return includes interest, dividends and capital gains where applicable
5 . Total-return index (includes dividends)
6 . Ratio of 10-year AAA Municipal yield to 10-year U.S. Treasuries yield
