The global economic outlook is currently going through a state of uncertainty both due to economic and political issues. On October 10, 2019 the Financial Times reported that the growing strength of the US dollar has triggered two different reactions from economists. Some fear disruption and instability, while others see positive economic growth on the horizon.
Respected brokerages are anticipating performance dips in early 2020, the S&P 500 broke through the 50-day moving average on the first day of Q42019, analysts have stated that the technicals show more downside, and more speculative assets such as cryptocurrencies have also experienced a 40% pullback in just under 4 months.
While no one knows for sure, several fund managers and investment professionals have been vocal about where they think the market is headed. Some are more optimistic about certain asset classes, while others share a more pessimistic outlook for the market in general.
Daryl Fairweather, Chief Economist at Redfin: Daryl Fairweather is at the pulse of the US real estate market as the Chief Economist at Redfin, covering the growth of the US market since 2012 and the subsequent housing shortage seen earlier this year. When it comes to the rest of 2019, Fairweather expects a slight slow down.
After the coolest spring home-selling season in at least eight years, homebuying competition didn’t have far to fall, but low mortgage rates ultimately drove a modest uptick in bidding wars in late summer when they typically become less common. With mortgage rates likely to remain near historic lows, I expect the bidding war rate to continue to level off, rather than follow its typical end-of-year descent, as 2019 comes to a close.
Kristalina Georgieva, Head of the IMF: The IMF’s new Managing Director, Kristalina Georgieva, has become extremely vocal in the past few weeks regarding a potential looming crisis that will be the worst since the 2007 financial crisis. In her first speech as the IMF’s new Managing Director, Georgieva shared:
The global economy is now in a synchronized slowdown. This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade. Uncertainty, driven by trade, but also by Brexit, and geopolitical tensions, is holding back economic potential. Even if growth picks up in 2020, the current rifts could lead to changes that last a generation: broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems.
Marius Ziubka, CEO of Bitsonar: Marius Ziubka has managed to make over 120% returns for his fund annually using artificial intelligence and keeping a close eye on the emerging crypto market. While dealing with an extremely volatile market, Ziubka holds a positive outlook on the state of the crypto market and what 2020 holds:
There are many critical events in the near future, such as Bitcoin‘s havening, that are expected to be catalysts for growth in the market. While many of the smaller assets in the market will likely suffer from liquidity issues, the top assets should see positive growth, especially as education and adoption slowly continue to improve.
Robert Shiller, Nobel Prize-Winning Economist: Despite winning a Nobel Prize and other accolades, Robert Shiller might be best known for accurately predicting the dot-com crash and global housing crash way ahead of other experts. While hesitant to make such a bold claim just yet, Shiller warns that he sees a similar mentality that happens before big crashes:
We’re sneaking back into the old 2006 mentality. Housing is driven by narratives. Before 2007, the narrative was flipping houses and the belief that home prices have always gone up. Then, after the Great Recession, it was tragic narratives about people who lost their home or dangers of borrowing too much or lending too much. It’s been 10 years since the crisis. Now, those narratives are starting to be forgotten.