12.05.2021 - Right now, investors are working from a common set of assumptions: Global activity is poised to meaningfully accelerate as vaccinations allow for a durable economic reopening. The US economy will lead the way, thanks to above-average progress on vaccinations and potent fiscal stimulus.
Recoveries will be uneven across geographies due to disparities in vaccine access. In some countries, and for some high-touch services sectors, the ongoing persistence of the pandemic will prevent a return to full health for a prolonged period.
This conventional wisdom does not make asset allocation any easier. To the contrary, the extent to which these consensus opinions are embedded in market prices may make deciding where and how to take risk a more difficult endeavor.
Identifying leading indicators that may shed light on how activity and asset prices will unfold is an essential tool for investors seeking to prudently navigate current market conditions.
One year ago, we examined what China’s nascent economic reopening foretold for the rest of the world. Now, with its economy in a much more advanced stage than its global peers, we are engaging in another China-centric analysis to highlight actionable lessons that inform our positioning ...