Ian Fung's Top Picks: Synopsys, Home Depot and StrykerBNN Bloomberg MARKET OUTLOOK The global economy is poised to improve this year, with Canada and the U.S. following it. Global manufacturing activity began to recover in the second half of 2019, helped by lower interest rates, especially in the U.S. However, the coronavirus has since put a damper on growth and estimates are being revised downwards. China continues to face the biggest risk of economic disruption from the virus, with impacts to global supply chains, manufacturing, demand for goods and consumer sentiment, which will affect the rest of the global economy. It remains to be seen how quickly conditions can recover, but the U.S. generally remains on a steady footing for now. If conditions continue to deteriorate and we see a longer path to economic recovery than is currently predicted by consensus, we could see additional stimulus from central banks. Equities are expected to outperform bonds, with the economically-sensitive areas of the stock market such as industrials and technology leading the way. Banks should also do well, with the outlook for U.S. banks looking particularly good. Given the uncertain impact of the coronavirus on the economy, we continue to favour higher-quality companies and are keeping some powder dry for opportunities should the market stumble.
|