Moneycontrol
Get App
you are here: HomeNewsBusiness
Last Updated : Dec 10, 2019 07:51 PM IST | Source: Reuters

BlackRock sees growth edging higher in 2020, limiting recession risks

BlackRock said it was turning neutral on US equities after their stellar performance this year, and was modestly underweight on European equities and European government bonds, preferring US treasuries instead or emerging markets where interest rates are likely to keep falling.

BlackRock said it expects world stock markets to squeeze out another year of gains and that it was cautiously shifting into more 'cyclical' assets such as Japanese stocks and emerging market and high yield debt.

Scott Thiel, chief fixed income strategist for BlackRock Investment Institute, the bank's research arm, cited a nudge higher in growth in the first half of 2020 and an improvement in the "mood music" around protectionism as reasons for the optimism.

We are modestly positive on risk assets," said Scott Thiel, chief fixed income strategist for the BlackRock Investment Institute. Market returns will be consistent with late cycle dynamic.

Close

BlackRock said it was turning neutral on US equities after their stellar performance this year, and was modestly underweight on European equities and European government bonds, preferring US treasuries instead or emerging markets where interest rates are likely to keep falling.

``Growth should edge higher in 2020, limiting recession risks,'' it said in its 2020 Global Outlook report. ``This is a favorable backdrop for risk assets. But the dovish central bank pivot that drove markets in 2019 is largely behind us.

"Inflation risks look underappreciated, and the lull in US-China trade tensions could end. This leaves us with a modestly pro-risk stance for 2020."

BlackRock is the world's largest asset manager, so any views from its Investment Institute are closely followed.

Thiel said another reason for his positive stance on local currency-denominated emerging market debt was that the US dollar was expected be broadly steady or slightly weaker next year. The were a breakdown in US-China trade talks or if China failed to deliver on modest stimulus expectations.

"We believe the incentives for the US and China to hit pause on their trade conflict are strong in 2020, although there could be turbulence along the way," the outlook report said.

Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Dec 10, 2019 07:50 pm
Sections
Follow us on