Wall Street has issued binders full of 2020 forecasts in recent days, and the consensus is clear: Strategists expect the global economy to remain subdued in 2020, with GDP growth only marginally stronger than in 2019.
Even so, banks are betting that stocks will keep pushing higher. Bank of America Merrill Lynch (BAC) thinks the S&P 500 can hit 3,300, a rise of nearly 7% over Tuesday's close. Goldman Sachs (GS) expects the index to reach 3,400, a 10% jump.
But the predictions rely in large part on a deescalation of the trade war between the United States and China. This is expected to boost investor sentiment and remove a drag on the world economy.
See here: Bank of America sees global GDP growth increasing to 3.2% in 2020, from 3.1% in 2019. That's based on an assumption that "the US and China will reach a partial trade deal in the next few weeks or months."
The bank acknowledges that nothing is certain. "While a deal is our base case, we cannot rule out the risk of a breakdown in negotiations," strategists warned clients. "We still see a wide gap in trust between the two sides."
But if US President Donald Trump delays a deal until after the 2020 presidential election — as he threatened to do in London on Tuesday — it's safe to say that hundreds of pages of annual Wall Street forecasts will quickly become outdated.
https://www.cnn.com/business/live-news/stock-market-news-today-120419/index.html
2019-12-04 15:15:00Z
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