Home / Business / The big concerns of stock investors in 2020, according to Citi's top stock strategist

The big concerns of stock investors in 2020, according to Citi's top stock strategist

With a few weeks to go until 2019, the S & P 500 has risen 23% and is on its way to the best annual return since 2013. This should not come as a big surprise as records keep coming up.

Call of the Day by Citigroup chief US equity strategist Tobias Levkovich, who recently spoke with MarketWatch about the big hurdles he sees for equities next year.

His first concern is based on a US Federal Reserve Survey at Senior Loan Officers, where banks report whether they ease or tighten credit conditions. If the report shows the latter, this tends to suggest that the economy will face challenges in about nine months. He notes that after the credit report from January with the tightened conditions in September, production shrank.

"The same survey among Senior Loan Officers came out on November 4 and again tightened up, which means that we will have another weakness in industrial activity in August and September next year, which will weigh on earnings," said he] Levkovich's second concern is that profit margin trends could fall next year, based on a lead margin indicator he has studied. Profit margins are a measure of the profitability of a company.

His third concern concerns the shape of the yield curve, which tends to give investors an idea of ​​the future direction of interest rates. He believes that this also signals stock market volatility in two years, and currently points to "incremental volatility" from late 2020 to 2021

, "meaning that the market normally falls behind".

Another concern in 2020? However, the US presidential election, which could create some uncertainty in the investment community, depends on the polls and the candidates, he said.

Levkovich, who was one of Wall Street's most accurate forecasters this year, believes there may be an overshoot. He raised his S & P 500 target to 3,050 in September.

] "We still believe that technicians and chartists can appreciate the market … there are likely to be some benefits, but probably a little less than before, since we only moved 7% in about a month," he said.

Read: This stock selection app outperformed the S & P 500 four times in the last quarter – for those investors

The Market


DJIA, + 0.33% ,

S & P

SPX, + 0.07%

and Nasdaq

COMP, -0.05%

Futures and European stocks

SXXP, -0.06%

have failed after worrisome German data. China's Shanghai Composite

SHCOMP, + 0.16%

rose from weak data due to economic expectations, while news from Japan and Australia were not great. The Hang Seng

HSI, -0.93%

fell as continuing unrest paralyzed the city.

The Statistics

Getty Images

This sum surpasses the number of S & P records in 2019, according to Dow Jones Market Data.

In the midst of reports that the Slope of Hope blogger Tim Knight offers his trading cycle chart:

Slope of Hope

The buzz

shares of Walmart

WMT, + 1.56%

rose after the retailer exceeded earnings estimates. Revenue from Aurora cannabis

ACB, -0.56%

lie ahead with chip manufacturers Applied Materials

AMAT, + 1.24%

and Nvidia

NVDA, -0.50%

Come after the conclusion.

Cisco shares

CSCO, + 0.19%

declined after the technology conglomerate predicted weak sales, triggering fears of a slowdown in the industry

XRX, + 0.40%

and HP

HPQ, + 0.00%


The social networking giant Facebook has deducted millions of unwanted user contributions from its Instagram service over the past six months. We will also hear from several US Federal Reserve officials, including Chairman Jerome Powell's second day of Congress.

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