Wells Fargo Investment Institute Releases Midyear Outlook ‘Recession, Recovery, and Resilience’

Outlook highlights five secular changes from the pandemic

SAN FRANCISCO–(BUSINESS WIRE)–Wells Fargo Investment Institute (WFII) today released its “2020 Midyear Outlook: Recession, Recovery and Resilience,” calling for a deep but short recession and a gradual U.S. economic recovery beginning in the second half of 2020. The report provides insights about the global economy, equities, fixed income, real assets, and alternative investments. In addition, WFII extends its economic and market forecasts and risks for the rest of the year and through 2021.

“The current economic recession is historic for its depth, but governments are responding proportionately and with speed and growing global coordination. Nonetheless, these jarring events will impact portfolios far into the future,” said Darrell Cronk, president of WFII and chief investment officer of Wells Fargo Wealth & Investment Management. “The task of our Midyear Outlook report is to examine the contours of change and how we believe investors should adapt.”

WFII expects low interest rates, low inflation, and U.S. equity outperformance among global equity markets, especially in large- and mid-cap equities. The S&P 500 Index target range is 3,150 – 3,350 for year-end 2020 and 3,400 – 3,600 for year-end 2021. The report also points out risks to the forecasts, such as a new surge in COVID-19 infections, and the weight of the accumulated bankruptcies and unemployment.

“Many risks and opportunities will arise. Therefore, it is important to maintain a temperament of resilience and flexibility,” Cronk said.

The report outlines five main themes that are already changing how investable markets interact with the economy. Investors should consider the following in the next three to five years:

  1. Consumption patterns are likely to change.
  2. Businesses will reassess how to add flexibility while maintaining efficiency.
  3. The pandemic is likely to intensify existing stresses globally.
  4. Government influence in the economy will increase — for better or worse.
  5. Health care will play an increasingly prominent role in the future.

“We believe the pandemic will likely affect the path and speed of the recovery in the coming 12 to 18 months,” said Tracie McMillion, head of global asset allocation strategy for WFII. “Investors should consider adapting their portfolios to those five secular changes from the pandemic.”

Download “2020 Midyear Outlook: Recession, Recovery and Resilience” and watch a Wells Fargo Stories video about what’s ahead for the markets through 2021.

Register for the WFII 2020 Midyear Outlook investor webcast and conference call on Thursday, June 18, at 4:15 p.m. Eastern time.

About the Wells Fargo Investment Institute

Wells Fargo Investment Institute is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company, providing investment research, strategy, manager research and thought leadership within the Wealth & Investment Management division, with the goal of supplying world-class advice to the company’s financial and wealth advisers.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.98 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,400 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 31 countries and territories to support customers who conduct business in the global economy. With approximately 263,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Additional information may be found at www.wellsfargo.com | Twitter: @WellsFargo.


All investing involves risks including the possible loss of principal.

Forecasts are not guaranteed and based on certain assumptions and on views of market and economic conditions which are subject to change.

Stocks may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. Mid-cap stocks are generally more volatile, subject to greater risks and are less liquid than large company stocks. Bonds are subject to interest rate, credit/default, liquidity, inflation and other risks. Prices tend to be inversely affected by changes in interest rates. Real assets are subject to the risks associated with real estate, commodities and other investments and may not be suitable for all investors.

Alternative investments carry specific investor qualifications which can include high income and net-worth requirements as well as relatively high investment minimums. They are complex investment vehicles which generally have high costs and substantial risks. The high expenses often associated with these investments must be offset by trading profits and other income. They tend to be more volatile than other types of investments and present an increased risk of investment loss. There may also be a lack of transparency as to the underlying assets. Other risks may apply as well, depending on the specific investment product.


S&P 500 Index is a market capitalization-weighted index composed of 500 widely held common stocks that is generally considered representative of the US stock market.

General Disclosures

Wells Fargo Investment Institute, Inc. (WFII) is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.

Opinions represent WFII’s opinion as of the date of this release and are for general information purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally. WFII does not undertake to advise you of any change in its opinions or the information contained in this release. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.

The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon.

Wells Fargo Wealth and Investment Management, a division within the Wells Fargo & Company enterprise, provides financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Brokerage products and services offered through Wells Fargo Clearing Services, LLC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. Bank products are offered through Wells Fargo Bank, N.A.


Allison Chin-Leong, 212-214-6674


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