Citigroup Inc.’s private bank wants its clients to work on an attitude adjustment.

Next year will be “brighter than many expect,” Citi Private Bank said in its 2020 outlook -- “Staying Positive in a Negative (Yielding) World” -- published Thursday. It rejects the idea that a recession is imminent.

“The point of view of many family clients I meet is one of a world full of angst due to politics and trade,” David Bailin, the private bank’s chief investment officer, said in an interview. That uneasy feeling “is pervasive, yet when you look at the economy you see facts that are completely different than that.”

Bailin said he hopes the report will help clients stay fully invested and avoid “the fear and paralysis” that led many to miss this year’s market rebound. A November survey by UBS Global Wealth Management found that among more than 3,400 global respondents, each of whom had more than $1 million in investable assets, cash made up 25% of portfolios, on average.

‘Staying Strong’

Strong consumer spending and a high U.S. savings rate feed into Bailin’s argument for a rosier outlook.

“Manufacturers both for consumer goods and industrial goods were expecting a downturn that never happened,” he said. “Between the consumer staying strong and the Federal Reserve and other central banks being accomodative, there was success in extending an already-long expansion.”

The bank predicts the expansion will continue, anticipating global corporate earnings to rise 7% or more from current levels, barring an escalation of trade disputes. Citi also forecasts equity returns in the U.S. and abroad of about 7% in 2020.

The bond market is one area where Citi has a negative outlook.

“In the U.S., we take positive yield for granted, but at one moment this year there was around $18 trillion in negative-yielding global debt,” Bailin said. He sees no reason for clients to own bonds when the only upside is capital appreciation.

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