PGIM FIXED INCOME
FIRST QUARTER 2021 MARKET OUTLOOK
The start of 2021 and the promise of broad vaccine distribution brings a sigh of relief to many. Yet, the long-term investment ramifications of the pandemic will continue to unfold over the coming years as governments and central banks adjust to the COVID fallout, industries transform to meet new demand paradigms, and households reassess spending priorities. Despite the scale of these looming developments and amid areas of rising inflation expectations and elevated asset valuations, PGIM Fixed Income believes a global economic recovery could begin as early as the second quarter of 2021.
PGIM REAL ESTATE
TRENDS FOR 2021: 9 REAL ESTATE TRENDS SET TO SHAPE THE NEXT 12 MONTHS
As turned out to be the case in 2020, it very much looks like 2021 will be a year with a great deal of uncertainty. The outlook is undoubtedly brightening, though, as vaccination programs get under way, promising to usher in a gradual return to economic normality. Inevitably, though, it will take some time for vaccines to roll out and take effect and —crucially for sentiment — for their positive outcomes to become clear. As the new year gets underway, PGIM Real Estate is focused on the nine major occupier and investment trends expected to influence market conditions and investment performance in 2021, and identifying potential opportunities for investors in the months ahead.
4Q20 MARKET REVIEW AND 2021 OUTLOOK
Events in 2020’s final quarter capped off a remarkable year for markets. News in November of the successful clinical trials of two vaccines, and their subsequent approval for use by the US Food and Drug Administration and other global health regulators, marked a watershed in the fight against the pandemic. The development sparked a further, broader rally in equities, notably benefitting shares of companies most exposed to the negative economic effects of the virus. Despite the significant headwinds caused by the ongoing pandemic, Jennison Associates expects the prospects for continued investor confidence and economic recovery to be promising in the year ahead.
With vaccine approval, production, and mass distribution predicted to ramp up in the next six months, QMA’s Global Multi-Asset Solutions team expects developed and emerging economies to remain on track to reopen and normalize next year. Consensus forecasts incorporate expectations for a V-shaped economic recovery in 2021. Given pent-up demand, inventory restocking, supportive financial conditions and potential for rising “animal spirits,” QMA sees upside risks to global growth forecasts. Fresh fiscal stimulus and continued monetary accommodation could add even more fuel for next year’s recovery.