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As part of their toolkit to support the economic recovery during the Covid-19 crisis, central banks could implement yield-curve control. Although appealing, the implementation and exit risks of such a policy counterbalance the benefits, particularly in the Eurozone. Moreover, the impact on financial markets could be significant since chained risk-free assets could temporarily leave risky assets unsettled.
Pierre BLANCHET, Didier BOROWSKI, Paresh UPADHYAYA, Annalisa USARDI
Global Views Analyst
The outcome of Super Tuesday took most people by surprise and maybe even Joe Biden himself… A third-time campaigner to become the Democratic Party’s candidate (after 1988 and 2008) for the November 2020 presidential election, Joe Biden had a tough start.
Head of Investment Intelligence
Fourth quarter 2019 earnings season confirmed the flat trend of the past 12 months. Hardly had 2019 ended than all eyes turned to 2020. For several months now, the earnings growth consensus for 2020 looked too optimistic. The spreading of coronavirus has only made us more cautious. The epidemic will certainly have a big impact on the first quarter of 2020 but some catching-up can be expected in the following quarters. In the short term the market should remain nervous. In the longer term a cautious optimism should eventually prevail.
2019 proved a strong year for US assets, with US equity markets recording the strongest annual total return since 2013 and the US aggregate bond index up almost 9.0%. In addition, the past decade proved the best ever for the S&P 500 index, which returned 256% overall, well above its historical average.
Kenneth J. TAUBES, Christine TODD, Sergio BERTONCINI, Noah FUNDERBURK, Marco PIRONDINI, Eric MIJOT, Annalisa USARDI, Paresh UPADHYAYA
CFA, Senior Economist