BCA Weekly Commentary 12/13/19
The big news of the week is the agreement to sign Phase 1 of the trade deal sometime in January. Work on Phase 2 is expected to commence immediately and since man core issues remain such as intellectual property this will take sometime to hash out we expect. Especially true as China continues to press forward on its own technology initiatives domestically which in our view will lengthen the process to buy time. Economic data for the week continued to be mixed, but business confidence rising was the highlight. Although it delayed further Tariffs it did not roll back existing ones which presented some disappointment. Overall the tentative agreement was consistent with our overall assessment of potentially better growth in 1H20 coming especially in Asia. Despite these expectations across our model portfolios we favor value vs growth and dividend paying stocks as we de-risk portfolios going into 2020. The blip in growth in 1H20 in our view will be short lived (6-9 months) thus our conservatism.
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