Monthly outlook end-February 2020

  • 06 March 2020
  • 5 minutes

A few weeks ago, our analysis was beginning to suggest a modestly positive environment for global economic growth. The coronavirus, specifically COVID-19, has changed that outlook to one of uncertainty and the potential for short-term contraction. Despite this, we remain comfortable with our long-term outlook.


The positive market response to the definitive election result have probably run their course. Meanwhile, the UK government’s entrenched stance on the need to abandon all European Union (EU) regulations present a challenging backdrop to unified and favourable negotiations from the remaining EU members.

With both domestic and international pressure affecting the potential for growth, there is only so much that central banks can do to counterbalance the prevailing negative sentiment. That has driven a sharp increase in the demand for and price of bonds, but that growth could stumble as central banks step in to support the broader market with tools that have the side-effect of making bonds less attractive.


In terms of equity, we continue to favour the US over the short-term as it is a large and well-funded market that has benefited from positive corporate earnings recently. By contrast, we are less confident in the near future of stocks in Japan and emerging markets where COVID-19 has stalled recent growth.

Turning to fixed income investments, the extraordinarily high price of German bonds makes them unattractive in our view. The German market has huge exposure to Chinese demand, so a recovery in the short-term outlook could make investors quick to reduce their ownership of bonds and move money back into higher-risk rated opportunities.

Important information

Any views expressed are our in-house views as at the time of publishing.

This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without our prior written consent.

Fees and charges apply at Schroders Personal Wealth.

In preparing this article we may have used third party sources which we believe to be true and accurate as at the date of writing. However, we can give no assurances or warranty regarding the accuracy, currency or applicability of any of the content in relation to specific situations and particular circumstances.

Forecasts of future performance are not a reliable guide to actual results. Investment markets and conditions can change rapidly and the views expressed should not be taken as statements of fact nor relied upon when making investment decisions. The value of investments and the income from them can fall as well as rise and are not guaranteed. The investor might not get back their initial investment.

Let's start with a free initial consultation

We'll begin with a free, no obligation conversation to understand if our service is right for you. There are no hidden fees or charges, and you’ll only pay if you choose to go ahead with the recommendations in your personalised financial plan.

Tap into some of the finest minds in the business

Our regular newsletters are packed with food for thought. Sign up for expert views and opinions, and choose which areas of financial planning and investment you’d like to hear about.

This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply.