Fullerton Investment Views - 4Q 2020
  Recession To Recovery: Equities Lead the Way


Summary

  • China is leading the global recovery, as our call of a painful but short global recession continues to play-out. Fullerton’s aggregate global growth indicator has returned to positive, and as it continues to gain strength it will become even more supportive of risk-assets.
  • Recoveries in economic activity and unemployment, back to pre- COVID-19 levels, will be much slower. However, this shouldn’t be a headwind to global markets - what it will mean is that global central banks will keep interest rates very low for a prolonged period.
  • With greater clarity that the end of the global recession is near, and as earnings growth expectations continue to improve, equities are performing very well. We now have a bullish view on global equities, and especially on China and Asian equities.
  • Key risks remain a possible resurgence in COVID-19 lockdowns, greater geopolitical risks (including uncertainties surrounding the US elections), and valuations becoming too stretched and eventually leading to a risk-asset price bubble (that could painfully collapse).

You can access the report here