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Global Views Analyst
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.
As we enter the 2020s, a look back over the previous decade provides a key take-away for investors: a zero-rate environment does not lead to zero performance for bond investors. Last year was a clear example as bond markets delivered strong performances with almost – if not above – double-digit returns across the board. Looking back over the past five years, annualised returns across different bond markets were also positive. The Bloomberg Barclays Global Aggregate USD-Hedged index delivered 8.7% in 2019 and an average of 3.5% over the past five years.
Head of Fixed Income
The new European leadership (at the head of the European Commission and the ECB), combined with historically low real interest rates, provides a unique opportunity to rethink priorities in order to meet the challenges at hand (economic, financial, environmental and security challenges). In economic terms, strengthening Europe and improving its competitiveness means tackling all these challenges simultaneously. At the level of economic policy, the link between monetary and fiscal policy must inevitably be rethought. But that's not enough. The expansionary policy mix must be accompanied by an improvement in the financial architecture. We identify two pillars on which the European authorities shold be able to act significantly in 2020-21: the Capital Market Union and budgetary rules. This is a prerequisite for dealing with the inevitable macrofinancial shocks that the future holds. Against this backdrop, the voices of Christine Lagarde and Ursula von Der Leyen (Presidents of the ECB and the Commission respectively) are eagerly awaited.
Head of Global Views
When we look fundamentally at the risks and rewards in equity markets for 2020, we find that value offers better opportunities than growth as implied expectations are lower and therefore more attractive for value at this point.
Kasper ELMGREEN, Andreas WOSOL, Eric MIJOT, Alexandre DRABOWICZ
Jean-Jacques BARBERIS, Simon FRASER, Laurent TIGNARD
Tristan PERRIER, Laurent CROSNIER, Kasper ELMGREEN
Sébastien Maillard, Director of the Jacques Delors Institute, and Amundi's experts, shared their insights on the new European leaders taking office and their agenda, and addressed possible asset allocation impacts.
Jean-Jacques BARBERIS, Sébastien MAILLARD, Didier BOROWSKI, Luc MOUZON