Market outlook Q1 2021: We expect global economic growth of around +4.5% in 2021. The second pandemic wave and the lockdown measures triggered by it will still slow down economic growth in the northern hemisphere in the coming months. More details on our assessments in the new Aquila Viewpoint.

Significant progress on the vaccination front increases the chances that the pandemic can be ended in most countries during 2021. However, a short-term relapse into recession in countries in the northern hemisphere is no longer avoidable due to the sharp rise in case numbers. As the beginning of the resumption of “normal operation” of the most damaged industries is becoming apparent, the financial markets can see through the recession hole. Presumably, this is why the wave of insolvencies, e.g. in the tourism sector, has been able to flatten off considerably. A rotation into asset stocks and “pandemic victims” could continue.

The odds now favor the Democrats winning the next presidency, Congress is likely to remain substantially in Republican hands. Stock markets celebrated this increasingly likely election result with very strong price gains.

Parts of Europe are already in lockdown as governments fight the second wave of Covid-19. The US lags Europe in terms of the second wave but will probably soon[NP1] see a sharp rise in infection rates and be forced to implement new restrictions. Thus it is only a matter of time before additional fiscal and monetary stimulus is launched on a worldwide basis. (In the case of the US, probably “soon” after the elections.)

Poll data continue to predict a US election win for the Democrats. But the risk of there being no clear winner is high. A Democrat win should be good for infrastructure-related and climate-neutral businesses.

Market outlook Q4 2020: The economic recovery continues at a slower pace due to a renewed rise in the number of cases. The impact of the pandemic forced virtually all central banks in the developed world to bring their policy rates closer to the zero bound and thus to BOJ and ECB policies. More details on our assessments in the new Aquila Viewpoint.

Independent asset managers in Switzerland expect a second Corona wave in the next three months. Against this background, they expect a higher gold price.

Thanks to extremely stimulative fiscal and monetary policies economic data are improving and stock markets are booming. Further economic recovery and a continuation of the equity bull market will need further measures of stimulus.

Gold is now slightly overvalued and already discounts further monetary expansion. Indeed, excessive debt and related insolvency risks mean that a further increase in the money supply is likely. The gold price should continue to rise in the medium- term and gold mining stocks remain attractive.

The economic recovery is running out of steam due to reintroduced lockdowns. A wave of bankruptcies is yet to come, meanwhile monetary policy is driving equity markets to unprecedented heights. Read more in the Aquila Flash Update July 2020.

Gold and stock markets are driven by the money glut. If the virus continues to spread, the central banks will probably stick to their expansive monetary policies. Gold stocks in particular should benefit from this. Read more in the Aquila Flash July 2020.

Independent asset managers in Switzerland fear the consequences of a second Corona wave and expect Donald Trump to lose the next US presidential election. Read more in the new Aquila Asset Managers Index.