Macro | Rising risks
| GDP growth (in %, year-on-year) | 2019F | 2020F | |
| United States | 2.3 | 2.0 | |
| Eurozone | 1.2 | 1.1 | |
| United Kingdom | 1.3 | 1.3 | |
| Japan | 0.6 | 0.2 | |
| China | 6.2 | 6.0 | |
| World | 3.3 | 3.4 | |
| Fiscal deficit (in % of GDP) | 2019F | 2020F | |
| United States | 4.4 | 4.6 | |
| Eurozone | 0.9 | 0.9 | |
| United Kingdom | 1.6 | 1.6 | |
| Japan | 3.3 | 2.7 | |
| China | 4.8 | 3.8 | |
| Consumer price inflation (in %, year-on-year) | 2019F | 2020F | |
| United States[1] | 1.9 | 2.0 | |
| Eurozone | 1.4 | 1.4 | |
| United Kingdom | 1.9 | 2.0 | |
| Japan | 0.7 | 1.3 | |
| China | 1.7 | 1.8 | |
| Current-account balance (in % of GDP) | 2019F | 2020F | |
| United States | -2.7 | -2.6 | |
| Eurozone | 3.3 | 3.2 | |
| United Kingdom | -4.3 | -3.8 | |
| Japan | 3.2 | 3.5 | |
| China | 0.4 | 0.2 | |
| Benchmark rates (in %) | Current[2] | Sept 20F | |
| United States | 2.00-2.25 | 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] | Sept 20F | |
| Crude oil (WTI) | 55.4 | 54 | |
| Gold | 1,498 | 1,575 | |
| Copper (LME) | 5,683 | 6,300 |
Equity | Lean times ahead?
| Current[3] | Sept 2020F Forecast |
Total Return (exp.)[4] |
Expected earnings growth |
P/E impact |
Dividend yield |
|||
|---|---|---|---|---|---|---|---|---|
| United States (S&P 500) |
2,923 | 3,000 | 4,7% | 5% |
-2% |
2.0% | ||
| Europe (Stoxx Europe 600) |
374 | 370 | 2.5% | 5% | -6% | 3.6% | ||
| Eurozone (Euro Stoxx 50) |
3,374 | 3,300 | 1.5% | 5% | -7% | 3.7% | ||
| Germany (Dax)[5] |
11,747 | 12,000 | 2.2% | 6% | -7% | 3.3% | ||
| United Kingdom (FTSE 100) |
7,128 | 7,100 | 3.5% | 2% | -3% | 4.8% | ||
| Switzerland (Swiss Market Index) |
9,806 | 9,800 | 3.2% | 6% | -6% | 3.2% | ||
| Japan (MSCI Japan Index) |
906 | 910 | 2.9% | -4% | 4% | 2.5% | ||
| MSCI Emerging Markets Index (USD) |
976 | 1,000 | 5.5% | 7% | -4% | 3.0% | ||
| MSCI AC Asia ex Japan Index (USD) |
605 | 620 | 5.1% | 6% | -3% | 2.7% |
Fixed Income | Negative yields all over the place
| Current[2] | Sept 2020F | ||
|---|---|---|---|
| United States | |||
| U.S. Treasuries (10-year) | 1.61% | 1.75% | |
| U.S. municipal bonds[6] | 80% | 80% | |
| U.S. investment-grade corporates | 112 bp | 105 bp | |
| U.S. high-yield corporates | 393 bp | 440 bp | |
| Securitized: mortgage-backed securities[7] | 50 bp | 35 bp | |
| Europe | |||
| German Bunds (10-year) | -0.64% | -0.50% | |
| UK Gilts (10-year) | 0.52% | 0.95% | |
| Euro investment-grade corporates[8] | 120 bp | 90 bp | |
| Euro high-yield corporates[8] | 370 bp | 380 bp | |
| Securitized: covered bonds[8] | 49 bp | 45 bp | |
| Italy (10-year)[8] | 195 bp | 240 bp | |
| Asia-Pacific | |||
| Japanese government bonds (10-year) | -0.24% | -0.10% | |
| Asia credit | 276 bp | 295 bp | |
| Global | |||
| Emerging-market sovereigns | 360 bp | 350 bp | |
| Emerging-market credit | 349 bp | 350 bp |
Currencies
F refers to our forecasts as of 8/22/19
WTI = West Texas Intermediate
LME = London Metal Exchange
bp = basis points
Performance over the past 5 years (12-month periods)
| 08/14 - 08/15 | 08/15 - 08/16 | 08/16 - 08/17 | 08/17 - 08/18 | 08/18 - 08/19 | |
|---|---|---|---|---|---|
| Asia credit | 2.1% | 10.2% | 2.4% | -0.9% | 10.9% |
| Dax | 8.3% | 3.2% | 13.8% | 2.6% | -3.4% |
| Emerging-market sovereigns | -3.0% | 14.8% | 4.5% | -4.6% | 13.1% |
| Emerging-markets credit | -1.1% | 10.9% | 5.8% | -1.4% | 11.8% |
| Euro high-yield corporates | 2.0% | 6.8% | 6.4% | 1.2% | 4.8% |
| Euro investment-grade corporates | 0.4% | 6.7% | 0.6% | 0.0% | 6.7% |
| Euro securitized: covered bonds | 2.1% | 3.7% | -1.0% | 0.4% | 4.9% |
| Euro Stoxx 50 | 5.7% | -4.8% | 16.1% | 1.8% | 3.8% |
| FTSE 100 | -5.0% | 13.0% | 14.0% | 4.1% | 1.4% |
| German Bunds (10-year) | 2.3% | 8.0% | -2.0% | 1.2% | 8.5% |
| Italy (10-year) | 4.7% | 9.0% | -3.3% | -6.6% | 22.1% |
| Japanese government bonds (10-year) | 2.0% | 3.8% | -0.4% | -0.5% | 3.6% |
| MSCI AC Asia ex Japan Index | -16.1% | 12.9% | 24.8% | 2.8% | -6.3% |
| MSCI Emerging Market Index | -22.9% | 11.8% | 24.5% | -0.7% | -4.4% |
| MSCI Japan Index | 4.2% | 2.9% | 13.7% | 9.0% | -5.6% |
| S&P 500 | 0.5% | 12.6% | 16.2% | 19.7% | 2.9% |
| Stoxx Europe 600 | 9.4% | -1.9% | 12.5% | 5.7% | 3.0% |
| Swiss Market Index | 5.0% | -3.7% | 12.4% | 4.0% | 14.0% |
| U.S. high-yield corporates | -2.9% | 9.1% | 8.6% | 3.4% | 6.6% |
| U.S. investment-grade corporates | -0.4% | 9.1% | 1.9% | -1.0% | 13.0% |
| U.S. securitized: mortgage-backed securities | 2.7% | 3.9% | 0.8% | -0.5% | 7.1% |
| U.S. Treasuries (10-year) | 3.4% | 7.0% | -1.4% | -3.1% | 13.7% |
| UK Gilts (10-year) | 5.4% | 12.3% | -1.0% | -1.1% | 9.2% |
1. core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures)
2. Source: Bloomberg Finance L.P. as of 8/22/19
3. Source: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 8/22/19
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
7. Bloomberg Barclays MBS Forward Index
8. Spread over German Bunds