4 Biggest Questions Investors Need Answered By 2020

Now that third-quarter earnings season has mostly been completed and investors are entering the relatively low-volume holiday season, it can be tempting for investors to put their portfolios on cruise control until the end of the year.

However, the Sevens Report’s Tom Essaye said Tuesday there are several key market questions that could get answered before the end of 2019 that could tell investors a lot about where the market is headed in 2020.

4 Questions

Essaye said investors should get clarity on these four questions by the end of December:

1. Will the U.S. and China sign a phase one trade deal?
2. Will the new tariffs set to go into effect on December 15 get implemented, delayed or cancelled?
3. Will economic data continue to soften, a potential signal of a 2020 recession?
4. Will yields on 10-year U.S. Treasury bonds rally (bullish) or continue to fall (bearish)?

2 Scenarios

Essaye said the answers to those four questions will dictate whether or not the current market situation is closer to the brief rate-cutting period in the mid-1990s that was followed by another 150% market gain by the end of the decade or the “too late” rate-cutting periods in 2001 and 2007 that preceded U.S. recessions.

“There are a lot of moving fundamental pieces in the market right now and all of them have the potential to affect the ultimate answer to that all-important question,” Essay said.

Benzinga’s Take

The trade war is the central element in all four of Essaye’s key market questions in that a trade agreement would likely improve economic data and could also boost 10-year Treasury yields. Despite some warning signals of an economic slowdown in 2019, the SPDR S&P 500 ETF Trust SPY has put together an impressive performance this year, gaining 25.5% year-to-date.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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