She also sees reasons for optimism, particularly if the Fed, whose policy has dominated the last decade, does as little as possible. “It’s the bears’ worst nightmare,” she observes. “No one is talking about surprises on the upside.”

Well, almost nobody. One year ago Phil Orlando, chief equity market strategist at Federated Investors, predicted the S&P 500 would end 2019 at 3,100. As of mid-December, his bullish call looks like it may turn out to be an underestimate. For 2020, Federated sees GDP rising 2.4%, significantly higher than the Wall Street consensus of 1.8%.

Growth Drivers For 2020
Three developments could drive growth higher in this year’s first half—the end of the General Motors strike; the potential resolution of Boeing’s problems with its 737 MAX jet; and even a skinny, Phase One trade deal with China. “Stronger export volume could drive GDP,” Orlando says. “The Street thinks manufacturing is on a glide path to recession. We don’t.”

Virtually all foreign markets possess more attractive valuations than the U.S. Orlando admits he isn’t sure how trade negotiations with China will play out, but things aren’t likely to get much worse. A Phase One skinny deal with China could boost emerging markets, and any sort of Brexit deal would have a positive impact on Europe.

The S&P 500 hitting 3,500 in 2020 isn’t the only surprise Orlando sees. Big changes on the geopolitical scene could intensify and dramatically impact global investors, though events have still to unfold.

Advisors and their clients can’t have escaped noticing that protests have erupted everywhere from Chile to Paris to Beirut to Hong Kong. Orlando believes that China’s President-for-Life Xi Jinping is “painting himself into a corner.” He adds that his boss, Federated’s Chief Investment Officer Stephen Auth, thinks that President Trump might last longer in office than Xi Jinping.

Chuck Clough, chief investment officer of Clough Capital, didn’t put a time frame on Xi’s tenure as China’s leader, but the award-winning ex-Merrill Lynch chief market strategist voiced similar doubts when he spoke at Financial Advisor’s Inside Alternatives & Asset Allocation conference in Philadelphia last fall about whether Xi would remain in office for the rest of his life.

With 400 million aspirational millennials, many observers see China as the new frontier for consumer goods. Yet its financial markets have struggled under the weight of debt and the trade war.

Getting an accurate read on what is happening in China is difficult. Who really knows? Sales there by non-Chinese companies provide some indication. If one wants to know how the affluent are doing in China, sales of Johnnie Walker’s premium scotch brands or luxury cosmetics brands offer some signals.