(Newsmax) Bond guru Bill Gross reportedly predicts that gains in stocks and bonds in 2020 will be harder to come by as fiscal and monetary stimulus loses its “oomph.”
Gross told the Financial Times that central banks around the world have grown cautious about the effects of persistently low interest rates on personal and institutional savings.
Gross explained that the “stimulative effects” of President Donald Trump’s corporate tax reform had fully worked their way through the economy during the past two years. “To retain the 1 percent boost that it provided to the economy . . . the deficit needs to expand by another $1tn or else the economy expands by 1 percent less,” he said.
U.S. stocks would be “flat to down 10 percent” in 2020, Gross said, while the yield on the benchmark 10-year Treasury note would end the year at 1.75 percent, slightly higher than it closed last week, the FT explained.
He also said that his favorite investing sector for 2020 was natural gas stocks such as Energy Transfer, a Dallas-based pipeline operator, and MPLX, a vehicle formed by Marathon Petroleum
