Outlook 2021: Esty Dwek (Natixis Investment Managers)
Outlook 2021: Esty Dwek (Natixis Investment Managers)
By Esty Dwek, Head of Global Market Strategy at Natixis Investment Managers Dynamic Solutions
What is the economic outlook for 2021?
2021 is set to be the year of the beginning of a return to normal. The first quarter is likely to remain weak given ongoing virus cases and confinement measures, but starting in the second quarter, as long as vaccine progress continues without a major hiccup, we should start to see a normalisation in activity as confidence grows that the pandemic is in the rear-view mirror.
That said, it will not be without hiccups. Moreover, we expect to see diverging growth paths across regions, with Asia firmly in the lead thanks to the Chinese growth engine and a better handling of the health situation.
The US will be next, with resilient consumer and a new fiscal impetus. And Europe will be lagging, because initial measures wane off and fiscal support and ongoing lockdown measures disparate at least for the first few months.
What are the biggest opportunities and threats for investors?
The question for next year will be how much of the recovery and the return to normal is priced in already and what surprises could throw us off course. We also keep an eye on inflation expectations and Treasury yields, which could spoil the party should they spike.
Nonetheless, we remain constructive on equities and credit as we believe that the combination of an improving growth outlook, eternal central bank support, ongoing fiscal measures, better global trade relations and the prospective end of the pandemic should keep investor sentiment buoyant.