Slower growth ahead
What can investors expect in 2020? CIO Deborah Cunningham explains her economic outlook.
Published November 22 2019
Hi, I'm Deborah Cunningham, Chief Investment Officer of the Liquidity Markets, here at Federated Investors.
What is your economic outlook for 2020?
We would generally see GDP probably coming in depending upon the quarter right around 2%. Some quarters a little higher, some quarters maybe a little lower. But definitely down from the 2017-2018 pace that we saw. Not unexpected in the context of a very long business cycle that we're currently in. I would expect to see the consumer continue to be an engine of growth within the US economy and manufacturing to probably be the drag along those same lines. Housing has made a very nice rebound in 2019 and we think that will continue into 2020.
The earning seasons that were a little bit concerned about as we went into the second half of 2019 have proven to be okay. And then there's also basically global considerations. What might happen from a trade war with China perspective, what might happen from a standpoint of Brexit and how does that play out in the context of our European exposure? And then you have immigration issues that are fairly sizable and close to home. You also have issues from a political perspective next year that have to be taken into consideration with a presidential election coming up.
We have impeachment concerns that are continuing to be debated from a congressional perspective and what all of this means is that basically you've got, I think, a world and a consumer that although continuing to provide the engine of strength for the economy, is a little bit on the sidelines. They're being influenced and impacted by other things that are happening in the world, and depending upon the outcome of those, they can be positive or negative so at this point we're looking at something that's fairly neutral and unchanged from where we are today.
Views are as on 11/8/2019 and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector. Federated Investment Management Company 19-30176 (11/19)