Our long-term return expectations for capital markets serve as key inputs into our strategic asset allocation process for multi-asset portfolios and provide context for shorter-term forecasting.
The repercussions of US midterm elections will be felt over the coming months and years, not days. The key is how the results are transmitted to the economy, chiefly through monetary and fiscal policy.
US markets have not taken kindly to the Fed’s renewed course of monetary tightening, but the effects of the Fed’s actions are stretching far beyond US shores.
Our outlook continues to be that economic recovery is in the offing and will broaden into synchronous, global expansion. Segments of the economy that were protected from the pandemic should stay in a healthy holding pattern.
Headlines suggest a significant disconnect between “Main Street” and “Wall Street”—a closer look at personal income and leading economic indicators reveals a different story.
With two COVID-19 vaccines approved in the U.S. and more fiscal stimulus about to be deployed, there is a clear bridge (vaccine) to post-COVID normalcy and abutments (stimulus) that should keep the recovery on course.