Horizon Handout April 2021

Economics

• Recovery delayed by persistent wave of infections. Sluggish vaccination progress weighs on recovery.
• USA and UK benefit thanks to swift vaccination of their populations.
• Monetary and fiscal policy support alongside vaccines suggest a strong recovery in summer.

Equities

• Stock markets have made volatile gains. Beneath the surface, strong rotations continue to occur.
• Analysts have raised earnings estimates across almost all regions, valuations have consequently fallen.
• We remain focused on “quality growth" companies, complemented by cyclical elements such as emerging market or UK equities.

Bonds

• Government bonds: Inflation expectations and yields are rising, investment opportunities remain unattractive.
• Euro corporate bonds show resilience and potential for further moderate spread tightening.
• High-yield emerging market bonds in local currencies are promising, duration should be kept short.

Alternative investments / commodities

• Gold stabilises and partly anticipates further rise in interest rates. Jewelry and central bank demand support prices.
• Brent oil recently corrected to USD 60 per barrel. Fundamental starting position remains good, prices likely to pick up again.
• Base metals consolidate after strong rally. Cyclical and structural drivers should provide further tailwind.

Currencies

• US stimulus package strengthens the US dollar for the time being. Rising government debt will only become a burden later.
• The British pound continues to benefit from rapid progress in the vaccination process. Bank of England waits and sees.
• The Swiss franc falls against the euro to its lowest level in over a year, but remains highly valued overall.

Read the full article here.