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Market Outlooks
Global Weekly Commentary: Our latest credit views
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We have closed our tactical underweight in EM debt as easy monetary policy is expected to stay, against the background of an improved 2021 outlook. Positive news on Covid vaccine development has boosted the case for an accelerated global restart in 2021.
Fixed Income Insights
Weekly Fixed Income Commentary: Positive risk sentiment buoys Treasury yields
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Long U.S. Treasury yields ended modestly higher, while shorter maturity yields were nearly unchanged to slightly lower. Investors were optimistic about continued progress toward a coronavirus vaccine and an orderly transfer of U.S. political power. In reference to its asset-purchase programs, the Federal Reserve (Fed) acknowledged, “…circumstances could shift to warrant such adjustments.”
Market Outlooks
Weekly Investment Commentary: Stocks hit record highs, but risks may be rising
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Stocks surged ahead during the holiday-shortened trading week as investor optimism over vaccine prospects continued to climb. The S&P 500 index rose 2.3% and several market indexes hit new highs, with the Dow Jones rising above 30,000 mark for the first time. Continuing the trend that has been in place for some time, value outperformed growth last week.
Market Outlooks
Global Weekly Commentary: Upgrading U.S. equities
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We upgrade U.S. equities to overweight, with a preference for quality large caps riding structural growth trends – as well as smaller companies geared to a potential cyclical upswing. We prefer to look through any near-term market volatility as Covid cases surge. Positive vaccine news reinforces our outlook for an accelerated restart during 2021, reducing risks of permanent economic scarring.
Market Outlooks
Weekly Investment Commentary: Stock markets are looking beyond near-term risks
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Investors last week focused on the positive coronavirus vaccine trials, as well as the negatives surrounding spiking virus cases and mounting economic lockdowns around the world.
Fixed Income Insights
Weekly Fixed Income Commentary: Accelerating coronavirus cases suppress Treasury yields
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U.S. Treasury yields closed lower last week, led by longer maturities. Despite positive news on possible vaccine progress, investors were focused on the potential near-term damage from surging virus cases across the globe. A public dispute between the U.S. Treasury and the Federal Reserve (Fed) about the Fed’s lending facilities also undermined investor confidence.
Market Outlooks
Global Weekly Commentary: Vaccines shape 2021 outlook
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Positive news on Covid vaccines gives us greater confidence that the economic restart can re-accelerate in 2021 – and that the cumulative activity loss from the virus shock will ultimately be a fraction of that seen after the global financial crisis (GFC). We prefer to look through any market volatility generated by the virus resurgence and renewed restrictions over the challenging months ahead.