By Bilal Hafeez 28-11-2019

How Should I Be Positioned? (UBS on Air)

(29 min listen)


Summary (You can listen to the podcast by clicking here)

Jason Draho, Head of Asset Allocation at UBS, and John Tousley, Head of Global Markets Strategy at  Goldman Sachs Asset Management, discuss their outlooks for 2020:

• Both believe global PMIs and labour market data have bottomed. They expect a global expansion with US growth at 2% and global growth at 3.5%.

• Both are optimistic on US and China phasing out tariffs. However, there is risk of the agreement being pushed into 2020 or possibly of a reversal in their stance – this happened in April this year.

• Both see higher rates in one to two years, which the markets have not currently priced in. Neither see a fiscal policy response from the US, but both expect it in the Euro-area.

• Finally, both are bullish equities though cautious in the short-run.

 

Why does this matter? Two major asset managers sound remarkably sanguine in their global outlook. They expect a continuation of the past few months into 2020. Their take on Euro-area fiscal stimulus appears optimistic given German rhetoric on the topic. They also seem surprisingly sanguine when it comes to valuations.