According to Bank of America, financial markets are set to continue rising in the first quarter of 2020.
Risk factors such as Brexit and the trade war are already subsiding; the Fed and ECB continue to maintain liquidity; the outlook for early 2020 remains bullish.
BofA strategists expect positioning to be increasingly bullish, and a survey among hedge fund managers shows that their attitude is positive.
The investment bank expects the S & P500 to reach 3,333 by March 3, or an increase of 5.2% from current levels. According to them, the yield on 10-year bonds will reach 2.2% by February 2, which is an increase of 36 points.
Although geopolitical risks have subsided at this stage, they are not completely extinguished. And the fact that extending the rally does not mean that investors do not consider allocating to defensive assets.
Source: Bloomberg Finance L.P.
Graphs: Used with permission of Bloomberg Finance L.P.
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