It’s set to be a roller-coaster year for the American economy with some major events coming down the tracks. Will this be a good year for investors? A bad year for farmers? Brace yourself for a no-holds-barred look at the major economic events expected in 2020.
Oh, Dow! Next Stop: 30k?
If the weekday ends in “y,” then the Dow Jones Industrial Average probably recorded another all-time high. This has been the new norm as of late, and there is no reason to believe that it cannot happen again in 2020. With the Federal Reserve keeping interest rates at historic lows and the White House extending investors greater trade certainty, equities should be able to put together another year of gains. Does this mean the Dow Jones could top 30,000 sometime in 2020? Sure, why not? Even if there were a meltdown, the central bank revealed at its December Federal Open Market Committee (FOMC) policy meeting that it is ready to fire off some bullets to sustain the economy.
China, Get to Phase Two
Now that phase one of the U.S.-China trade agreement is complete, the world’s two largest economies are set to embark on the second and perhaps third phase of trade negotiations. No date has been scheduled for the next chapter, but Treasury Secretary Steven Mnuchin warned that phase two may come in stages, saying “Phase two may be 2a, 2b, 2c, we’ll see, but this is unto itself a huge accomplishment for the president.” In other words, you had better build your supply of Tylenol.
This may be something financial markets can handle as long as neither side introduces new tariffs or raises the current levies that are supposed to be reduced once the first phase is ratified.
Biden Our Time Until November
It is a cliché to say that the upcoming election is the most important in the nation’s history. Does this trope apply to 2020’s? Well, it depends on the Democratic nominee and the resulting political makeup of the House and Senate.
If former Vice President Joe Biden faces off against President Donald Trump, not much will change – Biden conceded that everything fundamentally will remain the same if he is elected. However, if Senator Elizabeth Warren (D-MA) or Sen. Bernie Sanders (I-VT) manages to secure the nomination and defeat the incumbent, you can anticipate a steep decline in the financial market over fears of higher taxes, more debt, and greater government spending. If the Fed spigot is still running and the Republicans maintain control of the Senate and retake the House, the hemorrhaging may potentially subside, and we would wait. And wait… And wait…
Will US Still Be Full of Natural Gas?
America’s energy dominance has been well documented by Liberty Nation. The country has gone from dependent to independent, from slave to king. Will the good times continue in 2020?
The Energy Information Administration’s (EIA) short-term energy outlook expects U.S. crude oil production to average 13.2 million barrels per day (bpd), up from 12.8 million bpd this year. This can be explained by crude prices forecast to hover in the $60-$70 range because the Organization of the Petroleum-Exporting Countries (OPEC) has extended its output freeze, so domestic output could remain healthy to take advantage of higher prices.
The EIA is forecasting natural gas production growth to slow to 2.5% year-on-year, compared to the 9% jump in 2019. The reason? Prices have plunged 35% over the last 12 months to nearly four-year lows. Despite the world’s transition to the so-called bridge fuel, the demand is not enough to keep up with the huge supply.
Do You Even Bitcoin, Bro?
For now, bitcoin is winning the cryptocurrency war. The peer-to-peer digital currency soared 80% in 2019, but the real story is that it controls approximately two-thirds of the market. This is up from just 35% in January 2018. The other virtual currencies, such as litecoin, ethereum, dogecoin, and tron, posted annual losses. For now, it looks like bitcoin is the new gold, at least in cryptomarkets. The digital currency still experiences volatile sessions, and it did not overtake the U.S. dollar as pioneer bitcoiners predicted. You will probably see the alternative cryptocurrencies fade into obscurity while bitcoin continues to consume greater market share.
Will Electoral Dysfunction Plague Markets?
Next year should not be as volatile as 2019. Global financial markets have more certainty on trade and monetary policy. The biggest event for markets will likely occur in November, when millions of voters head to the ballot box. Will the pro-business, America-first agenda persist? Or will a greater dose of socialism poison the U.S. economy? Eat, drink, and be merry, for tomorrow we die.
Read more from Andrew Moran.