NVQ - Taking Stock: Q2 2021 Equity Market Outlook

• So far, 2021 isn’t looking too different from where we ended 2020. But we see the second quarter bringing greater economic re-awakening, underpinning our constructive outlook for U.S. stocks.
• While future rate-related panics are likely, we expect rates to remain low for some time as central banks globally look to maintain support and see economies to full recovery.
• Markets are priced for positive vaccine news, and while positivity is our base case, any disappointments in vaccine supply, distribution or adoption - or increased risk from virus variants - could stoke volatility.
• Fourth-quarter earnings strongly beat consensus analyst estimates as well as what was mostly conservative company guidance. We generally see the pattern continuing this year.
• We give cyclical stocks and reopening plays in general the advantage for the moment, while remaining watchful for signs of a cycle transition as the recovery moves forward - potentially returning the upper hand to growers.

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