Chicago-based global firm Calamos Investments notes that the U.S. and global economies are positioned for growth in its new Economic Outlook Report for 2020.
“We believe the U.S. and global economies are positioned for growth in 2020, benefiting from accommodative monetary policy, stimulative fiscal policy and a resilient U.S. consumer,” according to Calamos Investments, whose founder, chairman and chief investment officer is Greek-American businessman and philanthropist John P. Calamos, Sr.
The report, however, warns that although anxiety around the Fed and trade policy abated, investors should be prepared for “sideways markets and volatility fuelled by U.S. elections and geopolitics. Investors should also be attentive to the potential for higher longer-term interest rates due to inflation or geopolitical events.”
Calamos Investments which is identifying opportunities across asset classes, including equities, convertible securities and areas of fixed income, says that at this phase of the cycle “active management and individual security selection are paramount, particularly for the highest valued securities, which would be vulnerable to a shift in sentiment should earnings growth disappoint or monetary policy change course.”
The U.S. economy will sustain its expansion for 2020, the report predicts, noting however that the election cycle “will fuel volatility, particularly if markets sense an imminent change from the pro-business fiscal and regulatory policy that has supported the economy in recent years.”
It adds a cautionary note reminding investors that the economy and the markets are not the same. “While there are many opportunities for active approaches, we expect volatility to rise due to the U.S. elections and geopolitical uncertainty. Market sentiment shifts quickly, and we would not be surprised to see leadership rotation, sideways markets and drawdowns.”
The full financial outlook from Calamos Investments can be found here.