UBS says global growth will slow in 2020 to its slowest pace since the financial crisis

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• UBS chief investment officer has a very negative outlook for 2020.
• Mark Haefele said that he expects "global growth to slow in 2020 to its slowest pace since the global financial crisis," with the trade war the main reason.
• UBS also expects the US-China to worsen next year and Europe to also suffer due to the slowdown and Brexit.
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UBS released a report on Wednesday, and its outlook for 2020 does not look promising.

"We expect global growth to slow in 2020 to its slowest pace since the global financial crisis," said Mark Haefele, global chief investment officer at UBS.

Citing the US-China trade war, Haefele said the bank did not "rule out a worsening of the trade situation over the next six to 12 months."

"Against this unpredictable backdrop, we expect stocks to remain range-bound, and we hold a modest underweight to equities," said Haefele.

Haefele highlighted that since the global financial crisis of 2008/9, "value stocks have underperformed growth by 70%, including dividends." He said that much of this was down to a decline in bond yields, which had only worsened during the trade war.

"Bond yields fell as investors bought government bonds for safety," said Haefele, adding, "At the same time, investors established positions with a clear defensive bias. This trend began in May, when US-China trade tensions escalated and peaked in August."

The CIO also noted that the weak data coming from the US on manufacturing on Tuesday was a "troubling sign that the downturn in manufacturing could be worse than we have been expecting," as recession fears continue to mount.

He added that due to Brexit and poor manufacturing data from Europe, fiscal stimulus across the continent may not be enough to stimulate markets.