Global equity markets have seesawed in the past two months. The Covid 2nd wave and US election uncertainty are influencing the investor outlook.
The debate between US Congress and the White House over a further stimulus package and how this is influencing markets.
A number of risks remain prevalent but there is also cause for optimism. We weigh up the factors that are dividing market opinions.
In an important shift, the US Federal Reserve changed revised its inflation target meaning that policy rates will stay lower for longer.
Enduring negative real rates and fiscal stimulus may encourage inflation. The best performing assets will be those that are inflation protected.
One characteristic of the current crisis is the acceleration of many trends that were already underway.
Government support measures in Australia and the US are seeing disposable incomes temporarily rise for some people.
Valuation measures of equities are a significant determinant of future returns, particularly in the US.
Are we seeing the market climbing a wall of worry? The big positioning squeeze, and the impact of low rates on equity valuations.