Investment Outlook | J.P. Morgan Asset Management

Mid-Year Outlook: The Evolving Expansion

At a superficial level, the economy is simply in the midst of a powerful recovery from a deep recession. However, a closer look at the data shows many sectors that remain far from a full recovery as well as many that have positively thrived in the pandemic environment. Moreover, both the economy itself and government policy will forever be changed by the pandemic.

Learn more about the 2021 Outlook from Dr. David Kelly

THE U.S. AND GLOBAL ECONOMY

U.S. ECONOMY

While a super-fast economic recovery remains on track, a detailed look at April consumer spending reveals the distortions wrought by the pandemic and massive fiscal aid.

INTERNATIONAL ECONOMY

The global economy continues to make progress in moving on from the pandemic, but with still uneven regional trends.

U.S. EQUITIES

At some point, the post-COVID-19 surge in economic activity will run its course. In advance of that, markets will begin to focus on a return to a more moderate growth environment, although with somewhat higher inflation than we saw in the aftermath of the Global Financial Crisis.

FIXED INCOME

Navigating fixed income markets will be challenging over the next 12-18 months as nominal yields grind higher and robust economic activity keep credit spreads tight.

INTERNATIONAL MARKETS

Emerging markets offer investors access to the most powerful structural growth themes of the expansion ahead: technological innovation and the rise of the EM Asia middle class.

ALTERNATIVES

More and more clients are turning to alternatives — both public and private — as a solution in a world of low rates and meager expected returns.

ASSET ALLOCATION

Positioning within the cycle can help to inform positioning within the portfolio, and given some of the higher level headwinds present, having a firm grasp on the outlook will yield dividends, so to speak, in portfolio construction.

ESG

Sustainability encompasses many of the solutions and innovations that countries, companies and consumers demand for the future, which should translate to attractive long-term opportunities for portfolios.