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.

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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.

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Investment Outlook 2021
24/11/2020 News, Investment Talks, Market News

Investment Outlook 2021

“Marked by the most severe recession in modern history, 2020 was an unprecedented year. With the global pandemic continuing, we enter 2021 with a mildly positive outlook for the upcoming recovery, but with the assumption that the path to pre-crisis growth levels will be long and uncertain. Against this backdrop, investors should be ready to play rotations in their portfolios, favouring cyclical themes but also keeping a strong focus on quality. ”