Many countries are now moving out of the lockdown phase of the coronavirus response, so it is an opportune time to reflect on where earnings, growth and financial markets are heading. Opposing forces are affecting the investment context right now, with very negative economic data coming through at the same time that economies are reopening and starting to recover.
- Investors are so far maintaining their optimism that economies will successfully reopen over the coming weeks and months
- Earnings and growth will be seriously challenged into the end of the year, with a return to trend in 2021
- Corporate credit remains strongly supported by central bank measures while defensive growth stocks should benefit from the improving economic backdrop
