Monthly outlook end-January 2020

  • 12 February 2020
  • 5 minutes


The Brexit fanfare has sounded, papers have been signed, but Brexit has only really just begun. It’s now incumbent on UK and European politicians to negotiate a trade deal. The next significant milestone is likely to be that of Prime Minister Boris Johnson’s cabinet reshuffle. If rumours are to be believed, he could be setting up a staunchly pro-leave cabinet. That could reduce confidence among investors that the UK will be able to negotiate a mutually acceptable trade deal with the European Union. On top of that, Mr. Johnson will be seeking to secure deals with other trade partners, most notably the US which is the second-largest trade partner after the European Union. Barring any further viral outbreaks or international disputes, our analysis suggests that economic growth is likely to continue and even pick up during 2020. This would support growth in UK company share prices, though Brexit uncertainty is likely to limit this. The positive prospects for growth are likely to make low-risk rated government bonds less attractive, so the short-term outlook for their prices appears to be fairly negative.


We have upgraded our outlook for US company share prices. The indicators appear to suggest that the country’s economy is stabilising, helped by the recent signing of the preliminary trade deal between the US and China. This is having a positive knock-on effect across Europe and emerging markets such as those in Asia. The improving outlook for global growth and potential for inflation to be higher have also improved the short-term outlook for international government bonds.

Asset overview

Our general view of assets over the coming months can be summarised as follows:

Important information

Any views expressed are our in-house views as at the time of publishing.

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Forecasts of future performance are not a reliable guide to actual results. Investment markets and conditions can change rapidly and the views expressed should not be taken as statements of fact nor relied upon when making investment decisions. The value of investments and the income from them can fall as well as rise and are not guaranteed. The investor might not get back their initial investment.

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