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 |
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 |
Currencies
| Current[2] | Dec 2020F | ||
|---|---|---|---|
| EUR vs. USD | 1.10 | 1.15 | |
| USD vs. JPY | 108 | 105 | |
| EUR vs. GBP | 0.86 | 0.89 | |
| GBP vs. USD | 1.29 | 1.29 | |
| USD vs. CNY | 7.02 | 7.10 |
F refers to our forecasts as of 11/14/19
WTI = West Texas Intermediate
LME = London Metal Exchange
bp = basis points
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
7. Bloomberg Barclays MBS Forward Index
8. Spread over German Bunds
