In late 2019, a new strand of coronavirus, later named COVID-19, was reported to the World Health Organization (WHO) in the Chinese city of Wuhan. The first death from the virus was recorded on January 11 and a few days later the WHO confirmed a case had been identified in Thailand. Within a few months the virus had spread around the world, with government-imposed lockdowns and travel restrictions causing global economic activity to slump.
A statistical and qualitative review of Q4 2020 and investment outlook
Hope returned to markets in Q4, with announcements from several major pharmaceutical companies that effective vaccines for the coronavirus were available for widespread distribution. Against this backdrop the S&P 500 Index rose to all-time highs, driven by a rotation from tech to value.
Although this is undoubtedly good news, the economic damage from the coronavirus remains significant and, for investors, this likely means a structural change for interest rate markets that could last for years to come. We believe the Federal Reserve (Fed) will take a very cautious approach to monetary policy in the coming cycle, and its new policy framework provides it the flexibility to do so. When we look at the outlook for interest rates, some lyrics from The Who spring to mind – “I can see for miles and miles and miles and miles….”. Rates are not expected to rise for a very long time.
If yields are to remain in a new lower range for a considerable period, then investors may need to make their assets work harder, and we believe this should underpin the demand for credit.
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|
![]() |
|