2020: the year ahead. Maybe?

Our head of multi-asset investments, David Coombs, consults the tea leaves as he prepares for a new decade.

2020 light sign against the wall

By David Coombs 

It’s been a strange old decade, the 2010s. We’ve seen interest rates go places we thought impossible, central banks do things we never expected and, here in the UK, had more than our fair share of votes. A new year beckons, so the time is upon me to channel the Great Fate and divine the future from the tea leaves of the financial markets. So will the coming year see the return of the flapper or the roaring twenties? Behold* …

  1. UK equities will outpace all other developed markets
     
  2. British interest rates will rise by 0.25% to 1.00% in the second quarter as new governor Andrew Bailey stretches his muscles
  3. The 10-year gilt yield will close at 1.60% by the end of 2020
     
  4. Trump will be re-elected and give up Twitter (the last bit is hope over expectation)
     
  5. US/EU trade war rhetoric will catch fire and German auto sales will slump even further than they already have
     
  6. Mergers & acquisitions in the UK will pick up significantly, particularly cross-border – watch out for US financials looking for bargains. In this vein, Fox News will buy Channel 4
     
  7. UK retailers will continue to blame Brexit and the weather for poor performance
     
  8. “The authorities” will overreact to the Woodford affair because they will feel like they must do something or look weak; other finance firms will take the brunt while Neil Woodford pivots to the East for a new venture
     
  9. Amazon will introduce negative-one-hour delivery time in London, i.e the delivery arrives before you order it due to advances in big data and AI
     
  10. Jeremy Corbyn will win Strictly, giving him the mandate to remain at the head of the Labour Party “for at least another year”

*My predictions are not investment advice, indeed should barely be trusted; there isn’t enough salt in the UK to keep the roads ice-free, let alone adequately season my predictions.