The Investment outlook for 2020 - J.P. Morgan Asset Management
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The Investment outlook for 2020

Mid-year investment outlook 2020

Return to normality… but not in H2

 
 
 
 
  • In early June the market was pricing in a V-shaped recovery from the pandemic-driven economic contraction. We expect the recovery to be more gradual, with a few stop-starts along the way. Extremely low interest rates will help, but unemployment and corporate deleveraging could be a drag on growth.
  • The extent of near-term uncertainty, as well as the potential for political risk to mount as we approach the US election, could generate more market volatility.
  • For individual market sectors, the outlook depends on the path of the pandemic. If a full and sustainable reopening of the economy becomes possible, we may see a further rally for the most beaten-up sectors, coupled with a style rotation. For now, we believe it makes sense to maintain a nimble approach, with a focus on quality and an eye to ESG risks.
  • Low-risk options for income seekers are increasingly scarce. Rather than stretching for yield, investors may be better off being selective within fixed income and using a wider range of income-providing asset classes, including real assets for those who can accept lower liquidity.
  • Developed market government bonds look less and less likely to play their traditional roles of providing income and protecting portfolios in periods of market stress. Investors may need to look beyond the traditional 60:40 portfolio, with a greater role for alternatives and flexible fixed income strategies.
  • Read the economic overview >

Key Themes

Key themes from the start of 2020

 Karen Ward,
Chief Market Strategist for EMEA   
 Michael Bell,
Global Market Strategist
 Hugh Gimber,
Global Market Strategist

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