AEMB - Capital Markets Outlook: Q4 2021

• The strong economic and market trends of the first half of 2021 wavered during the third quarter. The coronavirus delta variant caught up with the US at the height of the summer, just as vaccinations slowed and concerns grew that inflation might flare and persist.
• Even so, equity markets fared well until September. The quarter-end saw fault lines exposed in China’s real estate market, increased worries over inflation and a more definitive lean toward potential tapering by the Fed in November.
• We still expect strong global GDP growth this year, moderating in 2022, but cautions remain.
• For equity investors, quality is the watchword. Within taxable and municipal fixed income, credit makes sense.

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