Where will the Macquarie share price close the year?

Can the Macquarie Group Ltd (ASX: MQG) share price recover its losses and climb higher in the second half of the year?

The Macquarie Group Ltd (ASX: MQG) share price has slumped 11.7% lower in 2020, but where will it finish the year?

Where will the Macquarie share price finish in 2020?

Unfortunately, no one has a crystal ball. However, we can try to piece together what the rest of the year might hold for Macquarie.

The Aussie bank isn't set to release its FY2021 half-year earnings result until 6 November. Nevertheless, we could get a better picture of the Aussie economy overall during the August earnings season.

I don't think we'll see the Macquarie share price surge significantly higher in 2020. However, I don't see any reason why we won't see a single-digit gain by the end of December.

What is there to like about Macquarie?

It's true that the outlook for Aussie banks this year is pretty unclear. However, unlike its big four peers, Macquarie is more of an investment bank than a retail bank.

That means recent market volatility could actually be a good thing for Macquarie's earnings. While the average investor can panic during uncertain times, experienced investors like Macquarie can do well. Clearly, during periods of high volatility, you have to be able to correctly pick the market or things can turn sour quite quickly.

One such example from another investment bank was seen at Goldman Sachs. Amidst the oil price war earlier this year, Goldman's traders booked $1 billion in commodities revenue through shrewd trading prior to the collapse of oil prices. 

If Macquarie's various investment units can generate strong earnings in a choppy market, that could boost the Macquarie share price higher in 2020.

What about the other ASX bank shares?

The Macquarie share price has been under pressure in 2020 but so too have the other ASX bank shares. 

The Commonwealth Bank of Australia (ASX: CBA) share price has fallen a similar 10.1% lower this year. Meanwhile, the National Australia Bank Ltd. (ASX: NAB) share price is down a whopping 26.3%.

I think there are a couple of things weighing on the big four bank shares right now. One is that the coronavirus pandemic has constrained global and domestic economic growth.

That's not good news for household or corporate earnings. The knock-on effect could be more loan defaults or a weaker housing market. Neither of these things are good news for the ASX banks or their earnings in 2020.

However, the Macquarie share price could be somewhat insulated from these factors. No doubt there are still a lot of risk factors facing the Aussie investment bank. But, if I was looking to buy in the Financials sector this year, I think Macquarie could be one to surprise in 2020.

In the interests of conservatism, I would like to see the company's half-year earnings in November, but I think some potential gains may be realised before then.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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