Cumberland Advisors Guest Commentary – Rosenberg Research Report (Jan 06, 2020) – The Year Ahead 2020

Author: David R. Kotok, Post Date: January 16, 2020

My friend and fishing buddy David “Rosie” Rosenberg has launched his own eponymous economic consultancy. Here’s his website link:

Rosenberg Research

Rosie has given us permission to share his year-end review with our readers. Here’s a thought-provoking trove of information and we provide a small excerpt below (full review including charts is in linked PDF).

If you like what you see, he is offering a 30-day trial. The website will tell you what to do.

We wish our friend good luck and thank him for allowing us to introduce him to our readers.

David R. Kotok
Chairman and Chief Investment Officer
Email | Bio


I have to admit that this is right up there with the most challenging ‘year-aheads’ I have ever prepared. The similarities to year-end 2007 and today are remarkable, as are the differences. The confidence bands around any forecast at any time are typically wide, but they are wider now than in 2008.

Back in December 2018, the market had experienced an abrupt 20% decline as the trap door opened underneath the equity market. The panic seemed like the beginning of the end of the bull market and economic expansion. Perhaps it was. Most stocks were heading into bear market terrain, and the credit markets absolutely froze right up. The combination of global trade friction, and the last Fed tightening move of the cycle, conspired to generate a risk-off investment backdrop that didn’t come to a complete halt until Jay Powell and crew issued a mea culpa of sorts shortly thereafter. If you recall, it was leaked that Treasury Secretary
Mnuchin was on the phones talking to the major banks, in a sign that the fabled ‘plunge protection team’ was getting ready to put a floor under the situation. The rally back to the highs was as breathtaking as the plunge was ominous.

There has never been a year in modern history like we saw in 2019. The safe-havens rallied, with gold up 18% and the long Treasury bond delivering a near-18% total return. And the pro-cyclical asset classes also rallied in size, with the S&P 500 triggering a total return of over 30% and Baa credit spreads tightening by more than
70 basis points in the corporate bond market. I should add in the oil price jumping more than 30%, though this was much more of a supply story than one of global demand.

While the equity market recovery suggests that it was a mistake to have believed it was the end of the economic expansion a year ago, Treasury bonds have proven to be a great place to invest through 2019. Economic fundamentals also fly in the face of the new equity market highs that have occurred since the trough at the very
end of 2018. <Continued…>

Continue reading the Rosenberg Research Report in PDF form here:,-2020)-The-Year-Ahead-2020.pdf

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