Glenn Freeman: Peter, here we are again, it's forecast 2020 now, into a new decade. So, thanks for joining us today to have a chat about this.

Peter Warnes: Pleasure, Glenn. Always like coming and having a chat.

Freeman: In 2020, when markets open, we're going to be coming off record highs in 2019, when I think overall the market was up something like 25 per cent, 26 per cent over the year, year-to-date anyway. So, is the only way down for stocks into next year?

Warnes: Well, that's a $64 question, Glenn. I suspect that it's going to be difficult to replicate what you've seen in 2019. And if you just backtrack a little and those performances have been probably the best in decades with 20-plus basically across the board. Strangely enough, the best-performing market in the world has been Greece which frightens the hell out of me. But if you go back to the 1st of January 2018, and look at a two-year spread, that the markets, the S&P is up about 18 per cent, 19 per cent, NASDAQ is up 25 per cent and the S&P/ASX 200 is up about 12 per cent. So, the two-year average is much, much more sober, the performance. And so, it gives you an idea just how volatile and uncertain the last two years have been. So, the performance of 2019 was also favorably disposed because of the low take-off point. Recall December 2018 was (indiscernible), so that this year we have a high platform to take off from. And so, it will be more difficult, and I suspect a replication of what we've had in 2019 is highly improbable.

Freeman: We haven't seen the US mentioned all that often this year without China mentioned in the same breath. And obviously, given China's reliance – or Australia's reliance on China very closely, what's the story there? I mean, do you think in 2020 are we likely to see any sort of an impasse in the US China trade standoff? Or is it kind of becoming a new normal?

Warnes: Well, look, the differences are still so wide apart, and you've got egos at play. Look, I don't think they'll resolve the trade, say, Okay, look, that's the deal and we've done it and we won't talk about this anymore. I don't think you're going to see that for several years.

Freeman: It's going to be like a movable thing from here on.

Warnes: Well, yeah, phase one could end up being faced the first of 12 phases. So, no, I don't think that – I think that that nagging and certainly will still be there, but probably more important – I mean, the trade deal is obviously important, but strangely enough, a lot of a resolution is already priced into the market in my opinion. So, what's happening in China internally is also important and the bank regulator there is trying to, if you like, try to westernise the biggest banking system in the world. So, we have to watch that, because it's a very it's the biggest banking system in the world. The debt levels there like elsewhere are at record levels, and that could be an interesting situation to unfold as well as what's happening on the trade front.

Freeman: In Europe, I mean, as we sit here now, I think the votes are being counted in the UK election now and it looks like Boris Johnson's likely to come back in a landslide.

Warnes: Whether the UK with Johnson winning now the exits the EU, that's obviously now likely. But underlying that you've got a Eurozone that is a disparate conglomeration of about 18 or 19 countries. You've got a new head of the ECB in Christine Lagarde, and she's saying, we can't do it all our own – you know, we can't do it by ourselves, ECB; we've got to have some help. And we need fiscal help. Well, how do you get 19 governments to say, yes, Christine, I'll follow you down the path. I mean, Germany is obviously – it leads and is the leader of the EU. Well, it might say, well, Christine, I understand what you're saying, but we don't want – we're not going to stimulate. And what she's trying to do is get an export-biased group of countries headed by Germany and France in particular, to have a more balanced domestic demand, balancing export or trading, net exports. And that's going to be very, very difficult to pull off.

And so, the Eurozone, is going to be one to watch. Germany, the manufacturing industry is obviously again, as I say, export driven. If you've got global demand subdued, then their economy is subdued. And for manufacturing sector, it has been in contraction all of 2019. In other words, the PMI is below 50 since January 2019. Now, how do you revive that with, as I said, a disparate group of economies or countries in one economy, I just don't know.