Chief Investment Officer Bernard Swords explains that the Pfizer vaccine news was very good last week and there could be more to come short-term as other providers gives updates this week. Bernard highlights that a combination of the US election outcome and the higher probability of a viable vaccine distribution from early 2021 gives an upward bias to economic growth forecasts and thus to earnings forecasts.
- The Goodbody Investment team favour risk assets in this environment. The team is increasing the equity exposure of the multi-asset models, with a greater cyclical bias in those additions.
- The team would still be cautious about deep cyclicals as these generally need inflation (and higher interest rates for banks) and despite a potentially good recovery in 2021, we are still in a low trend growth world.