The global economy is still fighting to recover from the ravages of COVID-19, but there are hopeful signs. Many countries, markets and sectors are climbing out of the crisis with the help of centralized policy responses.
While the path to a full recovery may not be smooth—and may take longer than initially anticipated—our senior investment leaders see reasons to be optimistic 2021 will bring brighter days. They offer their view of investment opportunities today and the uncertainties still clouding the outlook, including not only the pandemic but also the US presidential election.
It appears that a cyclical recovery is underway. However, we expect the path to remain uneven. Consumer confidence remains vulnerable to virus-related concerns, and the need for ongoing government support is essential for those who have become unemployed, and to drive future business investment. —Ed Perks, Gene Podkaminer and Wylie Tollette
We continue to model two phases to the global crisis. Financial markets currently remain in the first phase, characterized by a prolonged period of elevated risks and uncertainty, with the potential for additional market shocks that could last for multiple quarters. In the second phase, we expect a more sustainable recovery to eventually take hold, shortly preceded by periods of distorted asset prices and compelling investment opportunities. —Michael Hasenstab
The US presidential election is adding to market uncertainty. Democrats and Republicans have substantially different economic policy plans, so depending on the outcome, the tax and regulatory environment could be very different for the overall economy and for key sectors like energy, health care, finance and technology, with the associated impact on high-yield and investment-grade corporate credits. We believe high-quality, bottom-up research will remain crucial to successful investing. —Sonal Desai
Parts of Europe and Asia are ahead of the United States in returning their economies back to pre-COVID-19 norms. In Asia and particularly China, manufacturing and surprisingly, service industries have returned to near normal pre-COVID-19 levels. This contributes to our generally positive global outlook. —Stephen Dover
The COVID-19 crisis has catalyzed the acceleration of some long-term themes and trends that we have identified and followed in recent years. This trajectory will likely continue into 2021. Emerging markets have shown a continued appetite for structural reforms that could lay the foundation for lasting economic recoveries. China, for example, has stayed true to its longer-term goal of making domestic consumption a major economic engine—and a source of potential ballast during external demand shocks. —Manraj Sekhon
Whether it is worth investing in the US market now is a relatively tough question to answer, however people with huge risk appetite can try their luck at this point of time, enter low exit high!