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Global Markets Overview: June 2020

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By David Hoile | June 30, 2020

Tracking recent asset price moves and our outlook

In this month’s Global Markets Overview:

  • Allowing for uncertainty, our outlook is as follows: China GDP growth will start to recover in Q2. The US and Europe will experience a major recession in Q1 and Q2. GDP growth in advanced economies has started to pick-up in May and June; although the shape of recovery in advanced economies in Q3/Q4 2020 and beyond remains uncertain – we expect large divergences between countries given large differences in the number of virus cases and the size of fiscal and monetary policy responses. Small and midsize companies in advanced economies will likely be more negatively impacted. Less developed economies will suffer more than advanced economies in the nearer term. Not all sectors are affected equally in this scenario, e.g., service sectors, including aviation, travel, and tourism, are likely to be hardest hit – it could take several years for all parts of economies to fully normalise.
  • Recent market moves have been severe but, in our view, provide a reminder about the regular actions investors can undertake. We will always face systemic risks, whether they are economic, societal (such as COVID-19) or environmental. Thinking carefully about the following actions will provide more resilient and, ultimately, more successful portfolios over time:
    • The level of risk one can tolerate;
    • Maximising the amount of diversity;
    • Removing unrewarded risks;
    • Carefully thinking through and managing liquidity needs.

This edition includes a special report: Equity Bull or Bear?

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Senior Director, Investments

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