Disclaimer: Views in this blog do not promote, and are not directly connected to any Legal & General Investment Management (LGIM) product or service. Views are from a range of LGIM investment professionals and do not necessarily reflect the views of LGIM. For investment professionals only.

The CIO call: Winners and losers

In this month’s market update, we examined key themes that emerged in the Q4 company reporting season.

 

Yesterday I was joined on LGIM Talks by Madeleine King, Co-Head of Global Investment Grade Credit, and Gavin Launder, Senior Fund Manager, to discuss the market outlook in light of recent company earnings.

Key points covered in our discussion included:

  • Macro: We expect a synchronised, cyclical economic recovery in 2021 – an environment in which equities have historically outperformed
    • Premature removal of fiscal stimulus remains a material risk
  • Equities: We’ve seen a shift from balance-sheet concerns to a focus on earnings
    • Markets are looking past weak results from pandemic ‘losers’, e.g. leisure stocks, while ‘winners’ are being punished when they fail to deliver
  • Credit: A new wave of rating downgrades, albeit less severe than last year, may be on the horizon
    • Still, we’re close to peak leverage and some issuers may see upgrades

You can listen to the podcast on our website, Audioboom, Apple podcasts and Spotify.

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