The combination of (i) a phase one trade agreement with China, (ii) the enactment of the USMCA trade agreement, (iii) an accommodative Fed, and (iv) possible fiscal stimulus ahead of the 2020 election has the potential to boost U.S. growth.

Has global economic growth troughed? Signs of a possible rebound in global economic activity include improvements in global Purchasing Managers Indices, as well as increases in the prices of copper and oil. Around half the earnings of the S&P 500 companies come from overseas.

Have net earnings estimate revisions troughed? There has been a sharp improvement in net earnings estimate revisions by analysts for the S&P 500 companies.

Although stocks will likely provide more muted gains in 2020, equities will probably offer the best returns among major asset classes. That said, a real shooting war with Iran would drastically change the outlook.

Read our full report: First Quarter 2020 Market Update and Outlook.