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Elga Bartsch, Head of Research at Blackrock Investment Institute, shares her views on the macro environment into 2020. For Bartsch, the global growth slowdown of 2019 has much to do with trade policy uncertainties. But as a result of a dovish Fed, US consumers and a healthy US labour market are still prevailing against the headwind. Policies – not just fiscal ones – will also impact investors in the coming years, and Bartsch doesn’t see a major fiscal stimulus in the near future. She also expects a turnaround in the manufacturing sector. Finally, her investment recommendation involves adding bonds to equity positions.
Why does this matter? Blackrock, one of the largest asset managers in the world, is yet to throw its weight behind a recession call. It’s putting a lot of emphasis on consumer demand – yet we don’t know how long that will last as 2019 has been called the year of ‘retail apocalypse’. While emphasising bonds as a safe haven, there remains a question as to how safe bonds are with yields so low.