Lazard Asset Management

The Lazard Multi-Asset team details their views over the next six to 12 months. While the United States-China Phase 1 trade agreement and the United Kingdom’s exit from the European Union have reduced near-term uncertainty and improved sentiment, the coronavirus outbreak in China could have a noticeable negative effect on global economic activity.

A number of high-profile tech IPOs have disappointed in recent months, revealing cracks on the fringes of the market’s growth complex. As investors appear less willing to back some lofty valued tech start-ups, we ask whether this recent setback is a cautionary tale or, in fact, a canary in the coalmine.

Emerging markets are expected to grow more and grow faster than developed markets in 2020, and fundamentals appear attractive for both equities and debt. Trade tensions and global growth prospects are, as ever, the issues to watch in the new year.

A decade of central bank easing and the resulting low-volatility environment have made many investors complacent about risk management. We believe the next 10 years will be more volatile than the last 10 years, and risk management will be central to the delivery of consistent alpha.

Argentina and Brazil have an opportunity to reverse a long string of underperformance. The challenges are considerable, but we believe signs of progress in either economy could lead to a significant rerating of their markets.

Why should investors pay attention to the China A-share market? We explain why we believe the opening of one of the most liquid and diverse markets in the world has profound implications for global portfolios.

What will investors be talking about in 2020? We explain how six key issues could shape the global economy and financial markets next year.

In the US, unemployment is low, corporate earnings are growing, and businesses remain confident. But with global uncertainty running high, it may be time for investors to refocus on the fundamentals.

October has historically been a volatile month for stocks. But this year, it marked the second consecutive month of positive returns for global equities. Find out why.

For investors, year-to-date gains have been impressive despite the challenging macro backdrop, leaving equity markets near all-time highs and sovereign bond yields at levels that historically would signal recession. However, while we believe recession risk has increased, it is not our base case.

The fourth quarter will provide critical insight into the near-term direction of the US-China trade conflict as well as into whether the Fed will maintain the narrative of a mid-cycle monetary policy adjustment or switch to acknowledging an outright easing cycle.

Emerging markets equities performance was overwhelmed in the third quarter by macroeconomic factors, but we believe going forward, investors could benefit from favorable fundamentals and loosening central bank policies.

The United Kingdom and the European Union have signaled that a Brexit deal is still possible, with signs of a potential compromise over the Irish border starting to emerge. Although the prospect of reaching a deal before the 31 October deadline does exist, time is running out.

Chinese mainland equities, or A-shares, will be much more accessible to foreign investors. However, investors should do due diligence to more effectively understand the potential risks and rewards in this growing, and increasingly important, market.

Successful long-term investing depends upon the identification of sustainable companies. We believe traditional investment analysis tends to underestimate some risks faced by companies today.