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The US election and Covid-19 vaccines: implications for the economy and markets
Thursday 10 December 2020
News, Investment Talks, Market News
We estimate that the ten-year yield may reach 1.00%-1.25% by the end of 2021, with foreign demand reigning in potentially higher longer-term rates. We think equities will continue to be more attractive than fixed income because earnings yields through November exceeded investment-grade corporate yields, and the gap between dividend yields and the ten-year Treasury yield was the largest since the 1950s. While a divided government will limit the most aggressive policies of Democrats, including the Green New Deal, the power of Biden’s executive branch to increase regulation should bring meaningful pressure on companies to improve their ESG profiles. We expect continued momentum for ESG investing.
The likelihood of a divided US government removes a major potential headwind to the US economy, that is, higher taxes. With multiple Covid-19 vaccines showing promise, the US economy may surprise on the upside in 2021.
Other news
30/09/2022
EN, News, Investment Talks
Time to refocus on bonds - Rethinking portfolios after the great repricing
Inflation has risen to levels not seen in 40 years, leading to a repricing of financial markets this year, which has been particularly severe in the fixed income space.
30/09/2022
News, EN, Investment Talks
Italy election: no major surprise from the polls, maybe positive for markets
Investment Talks - September 2022
14/09/2022
News
ECB raises its rates and commits to do more in the next meetings