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March was another strong month for risk assets, especially in the U.S. as vaccine manufacturing and distribution ramped up.
Equities rallied, notably small cap and value stocks, amid more vaccine progress and the anticipation of more stimulus.
While we are constructive on near-term markets, we will focus on the rebound in business activity following progress with the vaccine.
November displayed the forward-looking nature of markets as global equities reacted positively that a vaccine may be distributed in 2021.
Rising COVID-19 cases and a failure from policy makers to pass further fiscal stimulus weighed on equity markets.
U.S. dollar strengthened in September as the existing monetary stimulus wane and expectations for fiscal stimulus before the election fade.
Sustained upside inflation risks remain low despite recent stimulus measures, but inflation dynamics are fluid.
Reopening risks weighed on midstream energy performance and relatively attractive yields benefited real estate.
In regard to fixed income, nominal Treasury yields fell across the curve and positive risk sentiment benefited credit spreads.
Investors can expect continued accommodative monetary policy and should recognize the Fed’s willingness to employ necessary emergency tools.