投资文摘 - 2020股市预测

文摘 - 2020预测

{as of 12/1/2019, Dow:28,051.41; S&P 500:3,140.98; Nasdaq:8,665.47; GlobalDow:3,152.93; Gold:1,463.40, Oil:56.37}

Today's articles about 2020's stock market outlook:

>>The New York Times (November 30) – "The Stock Market's Dangers Are Easier to See Now”
>>The Wall Street Journal (November 29) – "Wall Street's 2020 Prediction: The Stock Market Will Have a So-So Year - Many firms predict single-digit returns after a robust 2019 rally”
>>Bloomberg.com (November 27) – "RBC Sees Stock Turbulence Ahead as S&P 500 Pushes Toward 3,350 - Predicts S&P 500 gains will slow with near-term pullback risk - Joins others taming outlook amid political, growth uncertainty”
>>Barron's (November 23) – "A Bear Market Could Still Hit Next Year. Here's How to Prepare.”
>>CNBC (November 23) – "Wall Street's stock forecasters see just a 5% gain in 2020”
>>USA Today (November 15) – "More than half of wealthy investors brace for a stock market sell-off, more turbulence in 2020”

<<Goldman Sachs (Target: 3,400; EPS: $174; revised November 25, 2019): 2020 election outcome a risk to equities >>

Goldman Sachs strategist David Kostin lowered his earnings per share view for S&P 500 companies to $174, from the $177. He maintained his previous base case target to hit 3,400 in 2020. Noted that political factors could prevent stocks from appreciating to this level.

A durable profit cycle and continued economic expansion will lift the S&P 500 index by 5% to 3,250 in early 2020. However, rising political and policy uncertainty will keep the index range-bound for most of next year.

In the United States, equity returns during periods of divided federal government have typically exceeded returns achieved when one political party controls the White House, Senate, and House of Representatives. Since 1928, excluding recessions, when the federal government was controlled by a single party, the S&P 500 median 12-month return equaled 9%.  In contrast, the median annual return under a divided government was 12%,

A unified federal government post-election could prompt investors to assume the tax cut is reversed and lower projected 2021 EPS to $162 (-7% year/year growth), compressing the P/E multiple to 16x consistent with an index level of 2,600.  Goldman Sachs estimated that every one percentage point change in the effective corporate tax rate would translate to an about 1% change in S&P 500 EPS.

Base case asumes that the most likely 2020 election outcome is a divided government. Clarification of policy will expand the P/E multiple to 18.6x and push the index to 3,400 by year-end 2020.

<<BMO Capital Markets (Target: 3,400; EPS $176) – ‘Notorious Bull Market’ still has staying power >>

The Federal Reserve's pivot to cutting interest rates beginning in 1995 ushered in a goldilocks period defined by low interest rates, steady growth and U.S. large cap quality stock outperformance. A quarter-century later a similar environment is currently under way.

 <<Mark Hackett, chief of investment research at Nationwide. >>

Four reasons why this bull market in stocks will keep going in 2020:

1. The U.S. economy remains strong.
2. "Green shoots" appear in the global economy. (Strength in the U.S. dollar & aggressive monetary policy easing by global central banks)
3. Company earnings are poised to surprise.
4. There's genuine progress on trade talks.

<<J.P. Morgan Chase regional investment banking head John Richert>>

CEOs are worried about delivering earnings growth amid increasingly uncertain times, thanks to slowing growth around the world, the U.S.-China trade dispute and upcoming U.S. presidential election. As a result, most of the CEOs Richert speaks with are reining in capital spending for 2020 and modeling how a possible recession will impact their business.

The uncertainty for corporate leaders about 2020 and beyond has created an unusual situation: While CEO confidence is at the lowest in a decade, consumers are relatively optimistic, buoyed by wage gains and unemployment levels near 50-year lows.

There's a lot of discussions among industry players to figure out the best way to put companies together. For the mid-cap companies, CEOs are increasingly examining mergers of equals to scale up and help firms weather a future downturn.

<<TRADING ECONOMICS, https://tradingeconomics.com/forecast/stock-market >>

TRADING ECONOMICS expects stock markets to fall further and more rapidly than most investors anticipate on speculation that economic growth will be hurt by an ugly trade war between the United States and China. In addition, geopolitical tensions between Saudi Arabia and Iran, Pakistan and India, Russia and the European Union are likely to take center stage hurting investors appetite for risky assets even further. That said, there are short-term upside risks for this forecast as the addition of monetary liquidity into the financial system by central banks may make it cheaper for companies to borrow and investors to take loans to leverage their stock portfolios thus boosting stocks.