Introduction

This note covers the main questions investors commonly have regarding the investment outlook in a simple Q&A format.

Is the global economic recovery on track?

Yes. We anticipate global growth around 5.5% this year on the back of reopening sustained by vaccines, fiscal stimulus, easy money and pent-up demand as evident in double digit household saving rates. Global business conditions are strong. The global rebound was led by China but looks like being led by the US this year reflecting rapid vaccine dissemination and massive fiscal stimulus. Expect stronger growth in Europe and Japan in the second half as vaccine dissemination there speeds up. Emerging market growth is also likely to be strong.

Are vaccines working? What about new variants?

Yes. There are now five western vaccines along with vaccines from Russia and China. The evidence from numerous trials and results from Israel (where 58% of the population have received at least one dose) and the UK (where 45% have received at least one dose) indicate that the various vaccines are around 75% plus effective in heading off infection and 100% or near effective in preventing serious illness, hospitalisation or death (including for new variants). This is evident in a sharp fall in new cases, hospitalisation and deaths in Israel, the UK and US (where “only” 29% have received at least one dose but about 3 million people a day are now being vaccinated).

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