On Air with Altair: 4Q 2019 Market Review Video

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Video Summary


The U.S. and global economies appear to be on solid footing with the U.S. and China trade war on hold – even with the coronavirus having emerged as a near-term concern. While our economy has been growing at a modest rate by historical standards, we believe it’s in position to expand at a slightly faster pace this year. Consumer spending and the job market remain key pillars of economic growth. That said, we need to see improvement this year from manufacturing, business spending and – in particular – corporate earnings this year for the expansion to continue.


The Phase One trade deal signed by the U.S. and China is more of a truce than a comprehensive agreement, and it leaves billions of dollars of tariffs in place. Nevertheless, it should halt the escalation of the battle between the two sides that caused world trade growth to be negative last year for the first time in a decade. The biggest benefit is to lift business sentiment and reduce downside risk for investors of an expanding trade war and even higher tariffs. We expect the White House to try to keep trade battles contained this year as President Trump focuses on reelection. That should make trade less of a hindrance for markets in 2020.


We believe central bankers will remain accommodative even without a U.S. rate cut planned this year. The Federal Reserve has been expanding its balance sheet again – making large cash infusions into the banking system to support short-term lending markets. The Fed also could still cut rates if conditions deteriorate, with inflation and wage growth both contained. Last year’s three Fed rate cuts and ongoing easing by global central banks should continue to provide a tailwind. The Fed’s supportive stance continues to be a linchpin of global economic stability in 2020.


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