“Uncertainty” was the word that dominated the U.S. and global economic landscapes in 2019. The anxiety about a U.S.-China trade war and uncertainty about Brexit was the fear of 2019.
Indeed, the pervasive unease roiled global financial markets, and eventually led to a wave of interest-rate cuts by central banks. The cuts had a calming effect on the chaos. Now, we enter 2020 with the fog somehow lifting on those key uncertainties. A new year begins with some causes for optimism, yet still sources of doubt – some old and lingering, others just emerging. The trade turmoil isn’t over yet. However, recession fear is fading but consumer insolvencies and increase household debt is on a steady uptrend.
The big cheer in 2020 is the American consumer. This group is relatively unfettered with their debt levels. This dynamic has the potential to create a welcomed growth impulse to the U.S. economy, buffering the weight coming from cautious business sentiment alongside a weaker global economy.
The big fear in 2020 is that the trade turmoil isn’t over. In 2019, trade tensions weighed on global exports and imports. Financial markets and economy-observers hope the agreement between the U.S. and China, plus final signing of the U.S./Mexico/Canada pact by the three countries’ governments, will alleviate some of the uncertainty.
Happy New Year, from ETF Trade Advisor team