【英文】美银美林报告：2020年，下个十年的十大趋势Transforming World: The 2020s（56P）

Globalization has rewarded financial assets at the expense of real assets, and has  pushed companies toward domestic services vs exported goods and profit maximization  vs economic productivity. Our top investment ideas focus on the reversal of these  trends: Long real assets vs financial assets: own assets that benefit from higher growth and  inflation, e.g. commodities, farmland, real estate, collectibles, and precious metals. Long infrastructure and defense: as national security and economic sovereignty  dominate policy, own aerospace and defense, energy and water, plus infrastructure. Long small cap vs large, value vs growth: asset-light growth stocks will likely  underperform as national industrial policies and import substitution incentivize higher  operating leverage, investment in fixed assets, and higher returns to labor…all features  of small-cap and cyclical value sectors e.g. industrials, resources and financials rather  than tech and healthcare. Long FX and rates volatility: bond volatility has already started to rise (MOVE jumped  from 40 to 90 in 2019) and is expected to increase to 150 in coming years with a rising  risk of competitive FX devaluations, aggressive fiscal expansion, and more restrictions  to capital flows.

We enter the 2020s with a record 90% of Global Fund Manager Survey investors saying  the global economy is late cycle. Growth “bears” are bullish on policy impotence, yield  curve inversion, trade wars and Brexit, and point to the global recession in  manufacturing (global PMI at 49.7) and EPS (-3.7% 12m fwd YoY) as evidence of an  imminent slowdown.  We leave the 2010s stuck in an economic regime characterized by low growth and low  inflation. Real GDP has averaged just 2% in the US, 1% in the EU and Japan, and halved  from 12% to 6% in China as it rebalances towards a consumer rather than export-led  economy. This is despite historic levels of monetary accommodation since 2009: 768 central bank cuts, US$12.4tn of financial asset purchases and interest rates at 5,000- year lows.  What could trigger a recession (bond bubble)? The combination of globalization, lower interest rates and a policy and macro backdrop  of maximum liquidity and minimal growth have served to exacerbate wealth inequality,  and create a surplus of global savings relative to investment, i.e. extremely low “animal  spirits”. Higher debt has also failed to deliver higher growth (note corporations and  governments global debt up from US$105tn in 2008 and US$247tn in 2019).  Instead, the monetary policy largess of the 2010s induced significant upside (and  polarization) in asset prices, but the economic spoils went to holders of capital not  workers. A portfolio of bonds and stocks rose from US$100 to US$223, while US$100  of wages rose to US$125. Reliance on monetarism has also meant modern economic  expansions are now driven by booms and busts in financial cycles.