Local financial advisers expect steady growth in 2020
Special to the Daily
Hindsight is 20/20, but finding clarity in future uncertainty can be fuzzy.
The year of 2019 has been a very rewarding one for investors. One year ago we were tested with market volatility, and that’s a reminder that we need to continue to be prepared for uncertainty in the markets. As we look forward to 2020 and a new decade, some key trends and market signals will be important to watch. These include progress on U.S.-China trade discussions, slowing global growth, an encouraging outlook from corporate America, and continued strength in consumer spending.
Progress on trade remains central to growth projections. LPL Research expects 1.75% U.S. gross domestic product growth in 2020, which reflects the potential for continued trade and geopolitical uncertainties amid the expected gradual slowing of the economy at this point in the economic cycle. The bond market also is expected to show a modest increase in longer-term yields, supported by continued flexibility by the Federal Reserve in setting interest rates. LPL Research’s year-end 2020 forecast for the 10-year U.S. Treasury yield is a range of 2 to 2.25%.
Expectations for better corporate earnings growth in 2020, along with continued economic growth in the United States, could support stocks at current valuations. After the strong market gains thus far in 2019, corporate earnings may be the primary driver for stocks next year. The LPL Research team calculates that the S&P 500 could increase by mid-single-digits, consistent with profit gains, by the end of 2020, and it believes mild inflation and still-low interest rates will support these valuations. At the same time, we are mindful of our position in this extended business cycle, and we’ll be on the lookout for signs of moderation.
We will continue to monitor the impact of trade negotiations, the upcoming elections, and keep an eye on developments around the world. The LPL Research Outlook 2020 is here to help, bringing some clarity to a complex investing environment and providing insightful commentary to support investment decisions during the year ahead. Please contact us if you would like a copy of our Outlook 2020 publication.
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Tracy Tutag, CFP® CDFA™ and Stuart Green CFP® MBA, are Principals of Aprisent Financial Group, Riverwalk, Edwards, 970 926 6911. Securities offered through LPL Financial, Member FINRA/SIPC. Advisory services offered through Western Wealth Management, a registered investment advisor. Aprisent Financial Group and Western Wealth Management are separate entities from LPL Financial
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
Economic forecasts set forth may not develop as predicted.