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2020 Market Outlook - Stay The Course
December 24, 2019

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As we begin 2020, the longest economic expansion in U.S. history continues to rumble on, even if more at a persistent jog than a sprint. Jobs continue to be created at a very healthy pace, and frankly it is hard for those economists looking to pinpoint when the proverbial next recession might be when employment is this robust.
 
As it stands, growth has continued along the moderate 2% path that it has followed for the past 10 years. We’ll not quibble with the fact that economies are very capable of growing at slow rates for long periods of time. With no obvious excesses or systemic problems in view, this cycle has the potential to continue. In 2020, the U.S. economy is expected to grow at 2.3%,while the global economy should be a bit stronger at 3.2% overall.
 
Factoring in the many other bellwether economic indicators – like low inflation, an accommodating Federal Reserve interest rate environment, and renewed strength in the housing market – we see many favorable influences collectively pushing this late cycle expansion into new territory and sustaining the current bull market in equities.
 
That being said, we should not lose sight of what promises to be very interesting developments in U.S. presidential politics and in the presidential election that occurs later in 2020. Mix in the disruptions from the trade war with China, weakening domestic manufacturing output, unfolding Brexit drama in Europe and seemingly endless Middle East tensions over oil supply, and we can all expect some market buffeting along the way.
 
Overall though our message continues to be upbeat for extending the expansion and bull market, so we’ve entitled this year-end Outlook issue, “Stay the Course.”

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