Stocks could surge in 2020 but corporate debt a concern

Markets fell on Wednesday.

The S&P 500 fell marginally to end its five-day rally while the STOXX Europe 600 fell 0.1 percent and the Nikkei 225 fell 0.6 percent.

Despite the pause in the rally on Wednesday, Federated Investors’ chief equity market strategist Phil Orlando believes the S&P 500 could surge 10 percent and hit 3,500 by spring as the economy reaccelerates.

“We’ve seen the downturn. Now, we’re going to start to reaccelerate we think over the course of calendar 2020,” he said.

Similarly, Leuthold Group’s chief investment strategist Jim Paulsen sees a re-acceleration in the global economy. He thinks that the S&P 500 could rise another 15 percent in 2020 but also that “emerging markets will be the big winner of 2020”.

In contrast, UBS strategist Francois Trahan thinks that the surge in corporate debt could pressure stocks in 2020.

“Leaving aside our biases for markets and the economy, LEIs of credit markets point to a deterioration of ratings throughout 2020,” said Trahan in a note.