Skip to main content

2020 Outlook: Fear of the Fear of Missing Out

By: ETFdb
In 2019, investors waded through significant economic and geopolitical uncertainty to push U.S. equity markets to new all-time highs as the developments around Brexit and the U.S.-China trade negotiations arrived at less than dire outcomes. However, outside of the day-to-day headlines, economic data pointed to a continuation of the late cycle environment, emphasizing that bull markets do not simply die of old age. While we believe that equity markets will likely end 2020 higher, market risks seem skewed to the downside. On the other hand, economic risks have become more balanced as a result of a 180 degree shift in monetary policy year-over-year that is supportive for risk assets. The main challenge we see for markets is that the earnings recovery in 2020 is well priced into equities today, so we remain wary of the idea that valuations may begin to overshoot expectations for 2021 earnings. In fact, we see the chances of a valuation overshoot to be a real possibility as investors FOMO (fear missing out) on additional gains and the TINA (there is no alternative) mentality makes its way back into the markets. While the macro and monetary backdrop may be supportive for risk assets into 2020, the new fear is that of the fear… of missing out.
Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.