The financial markets have for some time now been riding a wave of exuberance over the prospect of economies again being able to run at full steam in the foreseeable future. This has lessened the impact of another slowdown in Europe and the US on the back of this winter’s new lockdowns.
Instead, the financial markets have looked ahead – beyond the crisis – and focused on the vaccine rollout.
“An unequivocal farewell to restrictions and lockdowns is probably still some way off, but recent developments give grounds for optimism and we continue to recommend that investors have a modest overweight of equities in their portfolios – in other words, a slightly higher share of equities than they expect to have in the long term,” says investment strategist Lars Skovgaard Andersen.
A good deal of positivity already priced in
While rising yields in recent weeks have triggered some turbulence in equity markets, Lars Skovgaard Andersen does not consider higher market rates and yields a major problem, as long as they increase for the right reason – namely stronger economic growth.
However, as the investment strategist points out, the speed and strength of the global economic recovery is still tinged with considerable uncertainty.
Quarterly House View: Equities still have more to give
After a long, dark, corona winter, spring is now knocking at the door and stoking optimism in equity markets, though the best times could well be behind us. That's one of the highlights from Danske Bank’s new report, Quarterly House View, where our investment team focus on developments in the global economy, current investment opportunities and the risks and expected return from equities.