Any discussion of the economic and investment outlook must start with an understanding of the human toll of the pandemic itself and the light at the end of the tunnel – herd immunity. This page looks at the 7-day moving average of new confirmed cases and fatalities of COVID-19. After surging in the winter months, the U.S. has begun to make considerable progress against the pandemic. Declining cases and fatalities beg the question: where are we on the road to herd immunity?
In 2020, China engineered a V-shaped recovery from the pandemic, the only major economy to do so, with its real GDP level regaining its lost ground by the end of 2Q20. China’s expansion continues this year, but with a focus on the quality over quantity of growth. China aims to shift gears back to its long-term priorities by normalizing policy and growth drivers. The March economic data shows the baton moving back to the “new China” (domestic demand and consumption) from last year’s “old China” (external demand and investment). For investors, this is the most interesting long-term opportunity: China’s domestic consumption, technological innovation and energy transition. Crucially, these themes are more accessible as China’s capital markets continue to develop and open up. Independent of the business cycle, China is turning into a structural allocation on both sides of the 60/40 portfolio.