2020 Imagine the Unimaginables – Things might turn out much better than expected!

2020 Imagine the Unimaginables – Things might turn out much better than expected!

In 2019, I expected markets to be driven by “Animal Spirits” — Animal Spirits is the combination of confidence and intuitive driven decision making (invented by John Maynard Keynes) Here is the link to the Unimaginables 2019 and a review below

2019 Unimaginable #1: This recovery cycle is NOT nearly over! Unimaginable after 10 years. Consensus leans more and more into an imminent recession camp. Animal Spirits will keep driving confidence in growth and employment esp. in Europe where they simply go for it – unimaginable! One indicator that will reflect this ongoing cycle: American mobility. Many have not been able to move because of negative equity on their houses. That is changing.

#1 worked except for Europe! Europe has yet to figure out the magic of Animal Spirits!

2019 Unimaginable #2: Manufacturing, not tech captures the attention of stock investors— again reflecting the ongoing cyclical recovery. This should favor European and esp. German shares. This will also be reflected in stable oil (rather than a more imaginable volatile oil price).

#2 Remained Unimaginable except for the oil part and is now consensus for 2020.

2019 Unimaginable #3:  Like in 2018, inflation remains elusive such that rates stay low and bonds stabilize at a high level AND economies get additional stimulus from fiscal spending and favorable tax policies!

#3 was mixed, inflation remains elusive as did fiscal spending (expected to be a driver in 2020)…

2019 Unimaginable #4: Britain opts for a no deal Brexit! Animal Spirits in full display!

#4 not quite, but still close and more imaginable now

Unimaginable #5: European Populists do extraordinarily well in the May 2019 elections helped by Brexit and Social Media…

#5 fortunately populist did not do extraordinarily well 

Unimaginable #6:  “Disrupt the Disrupters” – Not only Border Walls, but also Cyber Walls or rather Fortresses get built and prevail–no longer a trade war, but a cyber one! A Black Swan!

#6 remains unimaginable

Unimaginable #7: Ecology and Global Warming measures get temporarily sidelined as the infrastructure does not yet exist for mass electric car use, efficient and cheap batteries and their eventual disposal. First steps first.

#7 totally unimaginable and off the mark as Ecology and Global Warming were a main focus in 2019!

Unimaginable #8:    The Short selling Uptick Rule is re-instated confusing many algorithms, and classified as gambling and taxed accordingly, plus borrowing shares will be subject to usurious  rates. 

#8 remains unimaginable

Unimaginable #9: What Volatility? High volatility is one of the most underlying expectation for 2019, be it oil, interest rates and/or the stock market. But if we are still in a cyclical growth world, volatility like inflation might actually be elusive!

#9 worked!

Unimaginable #10: Women Disrupt! 2018 – The Year When Women Led the Way! Many start to wonder if we may experience setbacks in the progress women made in 2018, but unlike the global warming, women will continue to dominate headlines in successful business and political ventures.

#10 is working and will progress—may be a first woman President?

Keeping it simple when anticipating 2020 and what may seem currently unimaginable:

  1. No Deal Brexit , Animal Spirits conquer the UK and Germany is the consequential winner!
  2. Markets, esp. in the USA robust. Bonds may be tricky as central banks try to undo negative interest rates!
  3.  Like in 2019, Volatility unexpectedly remains subdued until the elections!
  4. Trump loses and the first Woman is elected President (not necessarily Elizabeth Warren)!

Call this Food for Thought… Things might turn out much better than expected!

Here’s wishing you all a joyous holiday season and a Good and Plenty 2020!

 May Peace be with You and Be Brave, Use Your Imagination and Let Your Animal Spirits Lead the Way!

 

 

 

 

 

 

 

 

 

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