BlackRock Inc. has upset a few equity bulls when it said that the returns of this year which were in double digits are going to be tough to replicate in the year 2020 as the central banks are going to pause the monetary easing.
Scott Thief who is their chief strategist told the media in London that in the year 2019, the impact of monetary policy shift had overshadowed the actual impact from the geopolitics to cause extraordinary outsized returns and he expects that the same is not going to happen in the coming year. He said on Tuesday that the mid-single digit and the high-single digit returns are going to be more consistently going with the returns late in the cycle.
The biggest manager of assets in the world has joined a chorus of analysts and investors who are of the belief that although it is worth sticking to the risk assets in the year 2020, the gains are going to be a lot more limited as the easing by the central banks as a response to slowdown fears had fueled a rally in the stock markets in this year as all the major indices trended around record highs.
They are of the opinion that the central banks had pivoted extremely aggressively in the year 2019 and this pivot is in the past now as most of the central banks are going to put a pause on their activities for most of the year 2020.
After the gains being strong, the asset manager has reduced the recommendation for the stocks in United States to being Neutral and that for the area around Europe to being underweight.
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