A sporting guide to how we see the markets.
As athletes compete to showcase their speed, endurance, strength and precision, countries are likewise striving to restart their economies and keep the pandemic in check.
At this stage in the recovery, macroeconomic considerations including inflation, unemployment, fiscal and monetary stimulus efforts all are top of mind for most investors. These forces, combined with public health data points including vaccine rates, shape how we view potential opportunities through 2021 and beyond.
The ideas that follow expand on the iShares midyear 2021 outlook and ETF implementation guide by matching sporting events with our macro views.
100m dash | Reopening trades still have legs
While peak economic growth may be behind us in the U.S., value- and cyclical-oriented investments may still hold appeal as the vaccine-led, fiscal and monetary policy-supported global economic restart continues. Value and cyclical sectors such as financials and energy still look attractive to us in the near term.
Triathlon | The trifecta of digital, sustainable and physical infrastructure
Just like a triathlon, infrastructure investing includes three elements. A recently announced $1.2 trillion bipartisan infrastructure plan has advanced to the Senate and could lead to historic investments toward revitalizing and rehabilitating U.S. infrastructure.1 Spending could benefit companies in a wide range of industries since the plan covers existing infrastructure including road and bridges, digital infrastructure including cyber security and 5G networks, and clean energy infrastructure including electric vehicles.
Swimming | Making a splash ‘across the pond’
In a packed pool, European stocks have found their stroke after a disappointing 2020. We see the “reopening theme” broadening to Europe, following the path of the global vaccine rollout. We also see Japanese stocks as poised to benefit in the medium term from higher earnings growth in the second half of this year despite the recent uptick in virus cases and restrictions.
1 White House, as of June 24, 2021.
Originally Posted on August 5, 2021 – How Investors Can Catch a Second Wind in 2021
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