Figure 3: The ASX 200 is expensive on a PE multiple but yields are attractive compared to term deposit rates. The economic impacts of the COVID-19 health crisis quickly changed the market view on the importance of financial strength, with over $30 billion of equity capital raised on the ASX in 2020 to repair balance sheets. The rationale behind this is that Australia is a commodities sensitive market. Just stay subscribed to the free newsletter service to receive the alerts. There is leverage in this stock market, presumably because of a heavy focus on commodities (volatile in nature) and some very well performing technology (emerging segment). Please choose another, Invalid password: must not contain more than 3 consecutive identical characters, Invalid password: must not contain more than 3 consecutive sequential characters, The password cannot contain the user name, given name, or family name. CB's head of Australian economics Gareth Aird expects house prices will rise 9% in 2021 … In sum what did we learn from our 3 leading indicators which help us forecast Australia’s stock market outlook for 2020 and 2021? So as long as this trend continues which is what we expect given everything we outlined before we should see a 20% rise in 2020 and another 20% in 2021. In our Investing Opportunities series we will cover special opportunities in the Australian stock market especially in small cap stocks. Cash rate. You might already have an ASX account with another platform. Let’s start with our conclusion. His methodology is unique and effective, yet easy to understand; it is based on chart analysis combined with intermarket / fundamental / sentiment analysis. Australia S&P/ASX 200 Stock Market Index - data, forecasts, historical chart - was last updated on April of 2021. 2021 Will Be the Best Year in a Decade for Dividend Hikes. We prefer companies with solid balance sheets, run by managers with skin in the game, and would avoid loss-making businesses in “hot” sectors that have enjoyed a substantial re-rate in 2020 on a “lower for longer” interest-rate thematic. With perfect foresight, you’d have been more likely to stick your money under the mattress than in the market – I think few people would’ve guessed that the market would be pretty much flat over the 12 months from December 2019. Mon, 16 November 2020 12:00AM. profile, My In the last 3 to 4 years Australia’s stock index has moved in this rising channel indicated on below chart. The second leading indicator for Australia’s stock market outlook is the commodities asset class. Valuations and uncertainty are elevated. The warning signs are everywhere. Either if commodities as a group set a lower low or if the Global Dow stock index breaks down. The Australian market looks expensive versus history at a headline level, trading at 25 times forward Price to Earnings (PE) multiple, versus a 10-year average of 17 times, which would suggest you aren’t. A stock market crash is bound to happen in 2021. Is there any pointer we get from this leading indicator to forecast Australia’s stock market outlook? As always, Dale answers your questions and shares his thoughts on how to invest and trade. Corporate debt levels hadn’t seemed to matter to the market much over the last few years, and some companies had been lured by cheap debt to fund share buybacks or increase dividend pay-outs. The take-away is that commodities are about to end their weak cycle, and prepare for a flat to mildly bullish period. Sabre Resources (ASX:SBR): The stock has just completed a $4.8M capital raise and in 1Q2021 will drill a number of priority targets right near Penny West (WA). Only 3 times in 20 years did we notice a divergence which tended to last 12 to 18 months. Move Over 2020: Market Forecast 2021 Goldman Sachs expected a 3.4% increase in GDP and “continued labor market improvement.” Goldman strategist David Kostin predicted that “a … Every time there is extreme bullish or bearish activity in the commodities complex it has a direct impact on Australia’s stock market. Somehow, you manage to predict with perfect foresight the events of 2020: bushfires, a global pandemic that would claim more than 1.2 million lives, a total ban in Australia on international travel, state borders to slam shut, the second-most populous city in the country to enforce a lockdown for 112 days. InvestingHaven's annual #australia stock market outlook is bullish for 2020 and 2021. Trade UK 100 - UK100 CFD In all other scenarios Australia’s stock market will be bullish. We absolutely recommend to subscribe to our free newsletter in order to receive future updates. We absolutely recommend to read the following predictions as they are highly informative and very well researched. Overall, 2021 is likely to see a progressive shift away from risk and uncertainty as the coronavirus, US election and Brexit risks all gradually (hopefully) fade into the rear-view mirror. US and emerging equities appear to be the consensus trade going into 2021. It really shows an almost perfect one-on-one positive correlation with Australian stocks. Artificial Intelligence – The Robots will rule the world. It means that we absolutely need to see a flat to bullish trend in the commodities space in order to see higher Australian stock prices. Coupled with stronger corporate balance sheets and relative valuation appeal, versus dwindling savings rates, it’s easy to construct a positive outlook for the Australian economy/equities in 2021. A cooling off period is good for investors and for markets. For instance investors tend to correlate Australian economics outlook with market action which is not a practice for success. News of another promising COVID‐19 vaccine pushed the market higher but the best stocks to buy for 2021 won’t be the same as 2020. Jan 13, 2021 – 6.29pm The Australian sharemarket is set to dominate other major asset classes in 2021 according to leading market strategists, as … An email containing a verification link has been sent to {{verificationEmail}}. The monthly chart shows this bottoming process between 2009-2015. We continuously, throughout the year, publish updates on our annual forecasts. Leverage the ASX Find An Adviser site and search for an adviser based on your geographic location and investment criteria. australian economy; CBA predicts 2021 Aussie house price boom of 8 per cent . We publish updates on our Australian stock market forecast. We expect that tilting your investments towards companies with high insider ownership (founders, key executives owning stakes in companies) will continue to be a good strategy. Twitter: twitter.com/investinghaven. We believe this bullish scenario has a probability of +90%. In other words every time Australian stocks diverged from the AUDUSD in the last 20 years it ‘coincided’ with significant (secular) weakness in the commodities market. Technology stocks are regarded as These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now. Over the long term, companies able to fund their operations, including growth, from internally generated cashflows tend to outperform those that repeatedly need to come to the market to raise equity. That’s because of the focus on commodities in Australia. So InvestingHaven’s research team is on record with a bullish forecast for Australian stocks in 2020 and 2021. Very simple, either commodities start breaking down or just one major commodity crashes (very unlikely, as we saw crude oil, copper and precious metals crashing hard in the last 6 years). There is a possibility in which this index will fall back to support, it is even likely it will happen. dashboard, Invalid password: this word has been flagged as unsuitable for use as a secure password. We see a very strong correlation between Australia’s stocks and global stock markets. Amongst a backdrop of home value increases, a tightening rental market and a mismatch of supply and demand, three property experts will finish out 2020 with a free market update on Thursday November 19 to make sense of what has been … If a stock market crash rears its head in 2021, the best game plan is to stay the course and add to holdings that keep winning. As the chart below shows, investing in the owner-led businesses listed on the S&P/ASX 300 index over the past 12 years would’ve returned 10 times your initial investment, versus an index return of two times, according to Airlie analysis. By Note that we did not include any Australian news source or economic forecast as an indicator. More importantly, global stock markets should turn positive anytime soon. Read more articles from a range of experts about investing trends, ideas for medium and long-term investment, and market insights. To answer those questions, let’s take a look at my three “Big Picture” predictions for the stock market in 2021: The S&P 500 Will Rise By at Least 10% in 2021. Historically, when you lower the price of money, people want more of it. The government is underwriting jobs via payments such as JobSeeker and JobKeeper, and encouraging a pull forward of investment via capex allowances. However, it’s not just during global crises that financial strength matters. We kept the same divergences (shaded areas) as the one on the AUDUSD chart above. The divergences are indicated with the shaded areas on the first chart. Based on these leading indicators we add Australia to our bullish outlook in our series of 2020 forecasts. We believe 2020 will be a bullish year for Australia’s stock market. 2021 Psychic Predictions for COVID-19. Credit: Supplied. We expect these measures to flow through to business investment, Australian house prices and consumer sentiment. Hopefully in 2021 we enjoy some precedented times, for once. As economies recover, if we saw a meaningful uptick in inflation, we would expect markets to react negatively (and sharply). That’s a big hint where the wind is blowing — and where the money is likely to be made — in 2021. Balance sheets matter, and we would avoid those companies that are highly geared heading into 2021. It’s December 2019, and you’re tasked with providing an outlook for Australian shares for the next 12 months. And in 2021, the popular collections of stocks called indexes are all up, up, up. As a general observation we have to point out to readers that Australia is pretty aggressive during its bullish trends. Airlie has an active, value-based investment style that aims to deliver attractive long-term capital growth and regular income to its investors. The key question when considering valuations is whether you’re being adequately compensated for taking risk. Most importantly, global stock markets need to become bullish again, and enter the RISK ON cycle that we are forecasting for a few months now. 2020 was the worst year in a decade for … The Airlie Australian Shares Fund (Managed Fund) (ASX:AASF) is available on ASX. The Australia S&P/ASX 200 Stock Market Index is expected to trade at 6869.29 points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Where Is The Bearish Case For Commodities? The US will split into two. N. NPM NEWPEAK METALS LIMITED. Prices reflect the Australian stock market index. In Australia, the Reserve Bank has lowered the price of money to an all-time low, and has signalled it will keep this cash rate for at least the next three years. There are just too many cracks in the financial system. Another Failed Bullish Attempt In Gold Miners, Commodities neutral to bullish + GDOW bullish. You see 1 million Australians unemployed as the country enters its first recession in 29 years. As always we use a top-down approach. When would a bearish scenario kick in? The only question is when. We expect commodities to end their period of weakness which is bullish for Australian stocks when combined with our bullish global stocks outlook. We see 2021 as a year to be selective. One reason has been the rise in U.S. Treasury yields. Read more here >>, A Silver Price Forecast For 2021 *Silver 30 USD Underway*, A Gold Price Forecast For 2021 *Gold 2200 USD Underway*, A Dow Jones Forecast For 2021 *New All Time Highs*, Dow Jones Long Term Chart on 20 Years *10 Must See Charts*, Breaking News That Financial Mainstream Media Failed To Notice, Protected: [Emerging Markets/Gold/Silver] Heads up Template. We would note that balance sheets look conservative across the board, in part reflecting a year of substantial capital raisings, with average net debt to underlying earnings (EBITDA) currently at 1.8 times, which is 20% below the average of the last 10 years of 2.2 times, according to our internal research. This is little surprise, given the expectation for monetary and fiscal policy to … The page lets you see top gaining stocks at a quick glance. Owner-managed businesses, which are run by original founders who retain significant ownership stakes, are the ultimate model of this. So rather than vague prognostications on what next year might hold, when assessing the top three things that matter for investing in 2021, we assess the same three things that always matter for any investment, at any time. This is our Australian stock market forecast for the coming years. We certainly had the tide go out in 2020. His work appeared on major financial outlets like FinancialSense, MarketWatch, ... Email: taki.tsaklanos@gmail.com. Given this outlook, what prediction are you likely to make for Australian equities? Taki has +15 years of experience in global markets. Please enter your username or email address to reset your password. In the dizzying world of investing, stocksseem to steamroll forward. Our Australia stock market outlook for 2020 and 2021 is bullish. This is the season to be optimistic, so let our stock market future predictions be based on the assumption that 2021 is “post-coronavirus”, in which case share prices ought at the least to return to their levels at the start of the year. This could set the stage for a more rewarding year for capital management for investors than 2020, with resumption of dividends, buybacks and potentially mergers and acquisitions (M&A) as companies utilise balance-sheet capacity. Emerging Asia stocks likely to continue the rally into 2021 – Jingyi Pan. Australia’s own currency, the Australian Dollar (AUDUSD) is the first leading indicator for Australia’s stock market outlook. Stock market 2021: Stocks expected to keep climbing as strategists look to a brighter 2021 A handful of strategists have so far offered their outlooks about where they think the S&P … But directionally this chart suggests higher prices for Australian stocks in 2020 and beyond. As a last step in our forecasting process we look at the long term chart of Australia’s stock index to identify some price targets. Trade: Long silver as the price races to an all-time high of $50 per ounce in 2021. The biggest profit potential is Australia's #smallcap stocks. It likely means that their weakness will end around current levels. She holds a Bachelor of Commerce (Liberal Studies) from the Univeristy of Sydney. Many investing tips and crypto market analysis. Moreover, we consider commodities a leading indicator for Australian stocks. Commonwealth Bank has forecasted that Australia's house prices will rise 16% over the next two years in what they're calling a housing market boom. A stock market crash is looking increasingly likely in 2021 – if not sooner. Next-generation tech supercharges frontier and emerging markets. You just need to copy the Australia and New Zealand formula. The best long-term & short-term Australian Mines share price prognosis for 2021, 2022, 2023, 2024, 2025, 2026 with daily AUZ exchange price projections: monthly and daily opening, closing, maximum and minimum stock price outlook with smart technical analysis This doesn’t mean that they will be wildly bullish already in 2020. This collection of companies that repeatedly require new equity capital, or “equitisers”, has underperformed by 9% per annum relative to low equitisers on the ASX over the past 20 years, according to Airlie analysis. Valuations and uncertainty are elevated. Fortunately, this helps us in our understanding, and consequently delivers meaningful input for our forecast. Leading indicators for Austrlian stock market is the Australian Dollar, the commodities market and the Global Dow stocks index. We see this index rising on average 20% per year in the last few years. If we zoom in we see this rising channel in detail on the weekly chart. We can only work with chart patterns to do a future projection. This assumes there will be a correction along the way, and we suggest to buy the dip. Look at 2002 when the global commodities market made a huge double bottom, right before it started taking off. The last 20 years saw a remarkable positive correlation between the Australian stock market and the Australian Dollar. Looking ahead, we back managers that have “skin in the game” (significant equity holdings in the business) and think like owners. Those states who can eliminate new cases of COVID-19, and those who cannot or will not. Any revision in our forecast are published in the public domain and appear in our free newsletter. The enticement to invest right now is clear: low interest rates, with governments and central banks globally willing to act as a safety net for demand. When does our forecast turn invalid? Therefore, the only way to track the pulse of markets and stay tuned with our forecasts like our Australian markets forecast in this article is to subscribe to our free newsletter >>. (Editor’s note: Almost $56 billion was raised in secondary capital on ASX in the calendar-year to October 2020, including emergency capital raisings). Last but not least the indicator that helps us a lot is the Global Dow stocks index, short the GDOW. This GDOW index is a very accurate indicator for our Australian stock market outlook. Figure 2: Index of owner-managed businesses has significantly outperformed the market. As the year draws to a close, you predict the president of the United States will refuse to concede the 2020 election outcome. Three stock market predictions for 2021. Also in 2014 when crude oil, the largest commodity in absolute dollar value, crashed 75%. Top notch forecasting with gold price forecast, many stock predictions, cryptocurrency charts. Readers are invited to also look at all our other our annual forecasts. This implies a good outlook for Australian stocks! Airlie Funds Management (Airlie) is a specialist Australian equities fund manager that brings together some of Australia’s most experienced industry participants. If we get it right with this forecast there is plenty of potential to outperform most other global stock markets, for sure the global stock index GDOW (which is one of our reference points). What do you have to do to get access to this? Or global stock markets tumble. Australia's share market closes on a high on the first day of trading for 2021 buoyed by a jump in house prices. (The market, on balance, expects further falls as shown by the ASX RBA Rate Tracker). We don’t find sufficient evidence in the AUDUSD as a leading indicator to help with our forecast, so we have to look at our other 3 leading indicators. This video contains my 2021 Australian Stock Market (ASX) predictions and economic views. Home prices grew an astonishing 2.1% in February according to newly released housing market data. This analysis presupposes the businesses you invest in pay dividends. More importantly, commodities need to be neutral to bullish for Australia’s stock market to thrive. Please log in with your existing credentials, My Australian Mines Stock Forecast, AUZ stock price prediction. Top gainers often continue to soar and reach new highs when their fundamentals are strong. We see 2021 as a year to be selective. We start with the monthly chart (long term, 20 years) and then turn our attention to the weekly chart (5 to 7 years). Ideally it stabilizes around current levels, and goes higher from here in 2020 and 2021. Emma Fisher has over 10 years’ investment experience with roles in portfolio management and investment research at Airlie Funds Management, Fidelity International and Nomura Securities. The MSCI World Value Index has gained over 10% since the beginning of 2021 while the technology-heavy MSCI World Growth Index is unchanged. Below is a summary of our forecast for Australian stock market outlook in the next few years. This has a very important insight for our forecast. You do not need a vaccine to eliminate the corona virus. Airlie is a wholly owned subsidiary of Magellan Asset Management Limited. The periods of divergence between Australia’s stock market and the AUDUSD can be explained by commodities weakness. There are also three themes that Citi is predicting for 2021. For the FTSE 100, that would be the high of 7,674.56 seen on January 17. We revise all 3 leading indicators, and conclude with projections about the Australian stock market index for 2020 and beyond. However, when you consider the dividend yield of the market (3.3%) versus the cash rate (0.1%), the picture looks less clear – you’ve never been paid more for putting your money in the sharemarket versus a bank deposit. But we also do publish other forecasts. However, the index is now at the top of the channel, not at the mid point, so we have to adjust for this. Australian housing prices look to be on a rocketing path even as summer comes to an end. That’s what readers find on the chart below: the Australian stock market index is overlaid by the commodities index. The cash rate determines the … See The 5 Stocks *Returns as of February 15th 2021 What becomes very interesting is that the AUDUSD chart now gets an additional perspective. Ignore All 2021 Market Predictions - Except This One If 2020 proved anything it's that any forecast beyond one or two months is likely to be upended by unforeseen events. The market rotation away from technology-heavy growth stocks toward more cyclical value stocks, which we discussed in our previous quarterly report, is underway. Samantha Reece. It has been said we only get to judge the quality of management decisions made during the good times after the cycle turns and the “tide goes out”. Unfortunately, this will weaken the dollar. Currently, it is clear that the AUDUSD has been declining for +18 months. Stocks that have increased the most in price — Australian Stock Market. In the same period of time the Australian stock market has declined (early this year) only to strongly rise throughout 2019. Rhys Prka The West Australian. Based on our assessments we forecast that commodities will be neutral to mildly bullish while global stock markets will be bullish in 2020 and beyond. Australian Securities Exchange Stock Forecast ASX Share Price Predictions with Smart … This is another old prediction. Cash rate going negative in 2021: Economists 7%, Public 47%. Cash rate rising in 2021: Economists 10%, Public 44%. We see inflation driving commodities higher, especially gold & silver and SBR is set to benefit. When it comes to forecasting the Australian stock market for 2020 and beyond we look at 3 leading indicators. That’s why we believe a fair forecast is for the Australian stock market to rise 20% (base case) to 30% (bullish case) in 2020 going into 2021. When a stock keeps making new highs it’s important to pay attention since there might be a retracement. The AUDUSD will not fall agressively. 2021 will see low-interest rates as the Federal Reserve commits to helping the nation recover. We prefer companies with solid balance sheets, run by managers with skin in the game, and would avoid loss-making businesses in “hot” sectors that have enjoyed a substantial re-rate in 2020 on a “lower for longer” interest-rate thematic. Readers who don’t want to understand our underlying forecasting method can ignore the rest of the article. From 2021, artificial intelligence will be equal … In 2021, economists discover that the growth rates in many frontiers and emerging markets have been woefully underestimated in recent years. We believe both are very unlikely to happen. View featured articles from ASX publications On the Board and Listed@ASX. That’s when looking at the mid point of the rising channel, and comparing year-over-year. Founded by John Sevior and David Cooper in 2012 and headquartered in Sydney, Airlie manages approximately $7.33 billion of funds under management at 29 May 2020 across a range of Australian equities strategies, primarily for institutional and high-net-wealth clients. Price target in 14 days: 0.0227 AUD. What this also implies is that for whatever reason commodities would break down we can reasonably expect Australian stocks to tumble! Experts to reveal tips and 2021 market predictions. Over the last 12 months leading to early March, that means 21% for the Dow, 29% for the S&P 500, and the Nasdaq's astounding 54% run. https://investinghaven.com/forecasts/australia-stock-market-outlook Send Text MessagePrint. Closer analysis reveals that key technologies may lie at the root of an acceleration in private sector productivity growth far beyond anything seen in the developed markets … That’s why we consider an Australia stock market outlook for 2020 and beyond to be of so much value. This page has economic forecasts for Australia including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the Australia economy. We saw a few months of outperformance around summer 2019. Whether it was the need to write down acquisitions purchased at the top of the business cycle, repair balance sheets with dilutive equity capital raisings and dividend cuts, or jettison assets that are now “non-core”, the recent market dislocations have shone the spotlight on management decisions made over the past cycle. Today we believe commodities are setting a major double bottom. This implies a bullish forecast for our Australian stock market outlook for 2020 and 2021. This thought-experiment highlights the core issue with forecasting: it’s hard to predict the big events that move sharemarkets, and it’s even harder to predict how markets will react to them. Many loss-making companies (particularly in the tech sector) don’t pay dividends and have enjoyed significant re-rates this year. Figure 1: Long Term Outperformance of Companies with Low Levels of “Equitisation”, Source: MST Marquee, Airlie Funds Management. However, the big risk is also interest rates. As per our forecast explained in our 16 series ‘Investing Opportunities‘ we expect stocks to get into a RISK ON cycle going into 2020 and 2021. The conditions for this to be true: These are the criteria for us to make us bullish on Australia’s stock market outlook for 2020 and 2021. We would be wary about these valuations, where risk/reward looks negatively skewed. There is lots of mining (base metals, precious metals, rare earths) in Australia. In fact, before we wrap up for Christmas, I want to focus on some key areas I believe could substantially beat the wider market in 2021. We forecast a 20% to 30% rise in Australia's stock index. Housing Market Forecast 2021's views for August and 2021. In this week’s Australian stock market update, Dale reviews what unfolded on the market in 2020 before he provides his prediction on the overall market and sectors including an outlook on how they are likely to perform in 2021. 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