GLQ - 2020 Global Market Outlook - Q4 Update: The Old New Cycle

• The global market is in the early recovery phase of the business cycle following the COVID-19 recession. This implies an extended period of low-inflation, low-interest-rate growth - an environment that usually favors equities over bonds. But after such a rapid rebound, an equity market pullback would not be surprising.
• We believe the market looks set for a rotation away from tech/growth leadership toward cyclical/value stocks. This also implies a rotation toward non-U.S. stocks, with Europe and emerging markets likely the main beneficiaries, in our opinion.
• Our cycle, value and sentiment investment decision-making process scores global equities as slightly expensive, sentiment as neutral and the cycle as supportive. This leaves us neutral on the near-term outlook, but moderately positive for the medium term, with slightly expensive valuations offset by the positive cycle outlook.

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