Events in the US, rather than the general election result or the outcome of Brexit, will impact clients most in 2020, according to the man who runs the model portfolio service at Chase De Vere.
Ben Willis said the health of the US economy would determine the outlook for the rest of the globe over the next 12 months.
Mr Willis said: "From a macro perspective our biggest concern for 2020 is whether the US economy will start slowing down and, albeit the worst case scenario, head into a recession.
"Although we do not believe that a US recession will occur, an historical indicator in the past has been the inverted yield curve between US two-year and 10 year Treasury yields. This has happened a couple of times in 2019 and has been a fairly reliable indicator of US recessions happening a year or two later."
"Policy makers in the US have sought to avoid a recession by cutting interest rates over the past 18 months, and economic growth has remained resilient."
He believes those policy moves would help the US avoid a recession, which would have a positive impact on the growth rate of the global economy. He said the practical impact for investors is that lower interest rates mean lower bond yields, and this should make equities a more attractive investment in the year ahead.
Mr Willis said trade tensions between the US and China had hindered the earning power of US companies in 2019, but that with the US presidential election happening at the end of 2020, it was likely Donald Trump would want to boost the economy by compromising on trade before then, removing one of the major barriers to stock market performance.
He said: "Ultimately though, it is all eyes on the US in reality. Fed monetary policy, US politics and US corporate earnings will determine the fortunes of the global economy, global growth and global markets over the course of next year.
"We do not envisage a US recession in 2020 and believe that risk assets (equities and corporate bonds) can still deliver inflation beating returns and outperform cash and government bonds. However, the storm clouds have gathered, so although we expect risk assets to rise in 2020, the direction of travel may prove very bumpy."
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