Macroeconomic Outlook: Optimism and Uncertainty Collide

In a Unique Environment, We Remain Tethered to Investment Policy

Tunnel vision paints a picture of optimism. During the second quarter, US GDP continued its steady climb, US equities continued to hit record highs, and job growth continued its ascent from pandemic-induced lows.

Yet, while we welcome burgeoning optimism, Chief Investment Officer Rick Pitcairn is looking more broadly at mixed signals fueling some apprehension. A far more contagious Delta variant is finding susceptible hosts worldwide, accounting for nearly all new US COVID-19 cases, and injecting added volatility into markets.

"Unenthusiastic bull" and "fully invested bear" are two monikers that capture market unease while still conveying a continued preference for stocks. Our August 2021 Macroeconomic Outlook makes sense of competing narratives in a still-strong market environment.

Key Takeaways

  • Economic growth, rising corporate earnings, low interest rates, and transitory inflation pressures support further equity appreciation, yet we believe a near-term correction would support long-term market health.
  • US stocks outperformed non-US in the second quarter. It may take slower US growth or a weaker dollar for international stocks to curb US dominance.
  • We continue to keep a keen eye on upcoming tax legislation, but do not expect draconian measures and recommend patience as negotiations play out.
  • In a unique environment characterized by both optimism and uncertainty, it is prudent to maintain exposure to stocks, be mindful of risks, and adhere even more tightly to investment discipline.


Read the Outlook




About Pitcairn

Pitcairn is a true family office and leader in helping families navigate the challenges and opportunities created by the interplay of family and financial dynamics. Through Wealth Momentum®, an experience-based family office model, Pitcairn helps families achieve a more effective and complete experience. Since its inception, Pitcairn has partnered with some of the world’s wealthiest families to meet their needs and drive better outcomes – year to year, decade to decade, generation to generation. Today, Pitcairn is recognized as an innovator, guiding families through generational transitions and redefining the industry standard for family offices. The firm is located in Philadelphia, with offices in New York and Washington, DC and a network of resources around the world.