What are your hopes and expectations for 2020? Corporate earnings markets are certainly feeling optimistic, as demonstrated by the historic highs of the forward P/E ratio, but earnings season will have to deliver if we hope to keep the good times rolling. Meanwhile, the bond market looks to already be experiencing some hardship, with the Barclays U.S. Corporate Bond (BBCB) Index yield-to-duration ratio kicking off 2020 by sinking to a record low. How do your clients feel about taking on greater duration-risk in exchange for lower returns? What goes up must come down though, and vice versa, so we’ll be keeping an eye on Palladium prices while we’re getting our (hopefully discounted) morning coffees. And the renminbi looks to be abiding by the same principal and gaining some traction against the dollar after falling to historic lows in the second half of 2019. Is anticipation of the phase one trade deal, or perhaps the deal itself, driving the recovery?
1. Will the first quarter’s earnings season be a time of reckoning or rejoicing?
![S&P 500 forward P/E ratio](https://blog.investbcm.com/hubfs/1.10%20chart%207.png)
Source: WSJ Daily Shot, from 1/10/20
2. What’s going on in your bond index?
![BBCB record low](https://blog.investbcm.com/hubfs/1.10%20chart%206.png)
Source: Bloomberg, from 1/9/20
3. AUM growth and performance don’t always go hand in hand…
![smart beta etfs AUM](https://blog.investbcm.com/hubfs/1.10%20Chart%201.png)
Source: Factor Research, from 1/9/20
4. Parabola up, parabola down…
![palladium up](https://blog.investbcm.com/hubfs/1.10%20chart%203.png)
Source: WSJ Daily Shot, from 1/9/20
5. Case in point…
![NYB coffee futures](https://blog.investbcm.com/hubfs/1.10%20Chart%202-1.png)
Source: WSJ Daily Shot, from 1/9/20
6. Currency appears to be part of the stage one trade deal…
![USD/CNY 2020](https://blog.investbcm.com/hubfs/1.10%20chart%204.png)
Source: WSJ Daily Shot, from 1/9/20
7. European manufacturing is still struggling…
![Eoruzone manufacturing pmi](https://blog.investbcm.com/hubfs/1.10%20chart%205.png)
Source: Pantheon Macroeconomics, from 1/9/20
8. And which U.S. companies are racking up the biggest ad spends?
![biggest ad spenders](https://blog.investbcm.com/hs-fs/hubfs/1.10.20%20Reserve.png?width=650&name=1.10.20%20Reserve.png)
Source: How Much, from 12/16/19