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Global Market Outlook
Resiliency Retested
The COVID-19 challenge severely tested global markets in 2020. Aided by unprecedented monetary and fiscal stimulus, markets responded with surprising resiliency. As we move into 2021, however, we expect markets will face another major test.
Macroeconomic Outlook
The resilience of global markets will be retested in 2021. We expect the United States and China to outperform in the year ahead.
Multi-Asset Positioning
A Balanced Exposure to Risk Assets in the Evolving Recovery
Our current asset allocation reflects our baseline expectations for economic recovery. We continue to favor global equities, credit, and gold.
Fixed Income Market Outlook
Central Bank Action Will Support Investment Grade Credit
Proactive central bank efforts will continue to be a substantial factor in 2021, translating to a favorable outlook for investment grade credit. Local-currency EM debt will also present a compelling opportunity; China warrants particular attention.
Equity Market Outlook
Growth and Quality Assets Are Most Likely to Deliver on Earnings
We favor equities compared with other asset classes – but earnings must come through. We believe growth and quality assets, which tend to be concentrated in the United States and in China, are most likely to deliver on earnings in the coming year.
Investment Theme: ESG
Momentum Will Carry ESG Investing Far Beyond the Pandemic
We believe 2021 could be the transition year for concerted global action to tackle climate change and other environmental and social challenges.
Archive
Since our Global Market Outlook update in April, shock waves from the COVID-19 crisis have continued to flow through global markets, economies, and societies.
State Street Global Advisors investment experts provide an update to the 2020 Global Market Outlook amid the COVID-19 crisis.
About the Global Market Outlook
As investment challenges grow more complex, State Street’s Global Market Outlook was created to alert investors to portfolio risks and opportunities in the coming year, based on the research of our investment teams. Research on near-term and longer-term market issues is at the heart of who we are as investors. It drives the kinds of outcome-oriented portfolios we create for clients, drawing on the full range of our indexed and active solutions, as well as our asset allocation expertise.
The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor’s or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.
The views expressed in this material are the views of State Street Global Advisors through December 7, 2020 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.
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Investing involves risk including the risk of loss of principal.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.
All the index performance results referred to are provided exclusively for comparison purposes only. It should not be assumed that they represent the performance of any
particular investment.
Equity securities may fluctuate in value in response to the activities of individual companies and general market and economic conditions.
Bonds generally present less short-term risk and volatility than stocks, but contain interest rate risk (as interest rates raise, bond prices usually fall); issuer default risk; issuer credit risk; liquidity risk; and inflation risk. These effects are usually pronounced for longer-term securities. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.
Investing in high yield fixed income securities, otherwise known as “junk bonds”, is considered speculative and involves greater risk of loss of principal and interest than investing in investment grade fixed income securities. These lower-quality debt securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer.
There are risks associated with investing in Real Assets and the Real Assets sector, including real estate, precious metals and natural resources. Investments can be significantly affected by events relating to these industries.
Investing in foreign domiciled securities may involve risk of capital loss from unfavourable fluctuation in currency values, withholding taxes, from differences in generally accepted accounting principles or from economic or political instability in other nations. Investments in emerging or developing markets may be more volatile and less liquid than investing in developed markets and may involve exposure to economic structures that are generally less diverse and mature and to political systems which have less stability than those of more developed countries.
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Exp. Date: 12/31/2021