Director of Global Macro Jurrien Timmer, reflecting on the past year since COVID-19 lockdowns began, notes that the markets have stabilized after an unstable bottom. Market leadership has expanded, and now the economy looks as though it could run hot in the second half of the year, especially with U.S. vaccinations rolling out. The COVID-19 curve in the U.S. is improving, and Jurrien believes that this, combined with additional stimulus, is good news for the economy. Jurrien thinks that bond yields are pushing higher and that a transition from growth to value is underway. Growth stocks have been running the show since 2008 (especially U.S. large-cap growth); these are longer-duration stocks that are very sensitive to changes in interest rates. He believes that small caps, value, commodities and rising yields should now be the focus of the market.
Recorded on March 15, 2021.