Global Market Outlook: Relentless optimism? -- Standard Chartered Wealth Management

Standard Chartered Wealth Management have released the Global Market Outlook for May.

Below are the key highlights. For details, please refer to the report.

Relentless optimism?

  • Expectations for a global economic and earnings recovery remain relentlessly positive, despite an increasingly tightening policy bias in China and the risk of higher US taxes. We favour equities over bonds.
  • US equities remain most likely to outperform other regions amid supportive policy, in our view. Asia ex-Japan faces headwinds from China’s tightening liquidity and a surge in COVID-19 cases in India and other markets.
  • Asia and Emerging Market USD bonds continue to offer value and Developed Market High Yield bonds may still have room to outperform. A further inflation rise is likely to push bond yields, net-of-inflation, lower – a positive for gold and negative for the USD.

Implications for investors

  • Prefer global equities over bonds and cash
  • Equities: Prefer the US and the UK
  • Bonds: Prefer Asia USD, EM USD and DM HY
  • The USD is likely to weaken against the EUR, AUD, GBP and CNY over the next 12 months

Further insights are available on the Standard Chartered Wealth Management Market Views page.