Macroeconomic Outlook: What a Difference a Year Makes

Vaccine Deployment and Economic Momentum Spark Optimism

As vaccines turn to vaccinations in the United States and select other regions, their economies have in turn accelerated. The correlation, as expected, is unleashing pent-up consumer demand and the corporate investment to meet it.

In his May 2021 macroeconomic outlook, Chief Investment Officer Rick Pitcairn assesses global growth projections and how they may translate to continued early-cycle conditions and a resilient bull market. While the short- to medium-term looks promising, a novel virus and the implications of vaccine logistics and uptake is the major wild card.

Key Takeaways

  • The tale of economic recovery is globally dependent on vaccine distribution. While the US, China, the UK, and parts of Europe are expected to carry global growth, emerging markets unable to contain the virus may experience a prolonged recovery.

  • Despite high valuations, exceptionally low interest rates and stimulus-aided growth may continue to spur equity gains, even with the potential for volatility or a 10-12% pullback.

  • COVID-19 remains the dominant risk to capital markets, with other areas to monitor including proposed tax increases and retail speculation.

  • Another risk is being out of stocks as markets rise. Pitcairn believes safety comes through a disciplined, diversified portfolio construction.


Read the Outlook