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Market perspectives: May 2020

28 April 2020 | Markets and economy

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In this latest Market Perspectives issue, we highlight the Vanguard house view on a number of current macroeconomic and market topics including monetary policy, economic growth, currencies, trade, asset returns and more.

Key highlights for this month*

  • The global recession will be short, with growth turning positive in the second half.
  • Developed economies will not return to normal until later in 2021.
  • Labor markets in face-to-face sectors such as leisure and hospitality will be hit hardest.
  • Expect the U.S. to lift shelter-in-place measures and most extreme social distancing by June 30.

Asset class return outlooks

Recent market performance has moderately raised portfolio expected returns. Our preliminary 10-year annualized nominal return projections, as of March 31, 2020:

Asset class return outlooks

Notes: These probabilistic return assumptions depend on current market conditions and, as such, may change over time. The projections and other information generated by the Vanguard Capital Markets Model® regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Distribution of return outcomes from the VCMM are derived from 10,000 simulations for each modeled asset class. Simulations are as of March 31, 2020. Results from the model may vary with each use and over time. Source: Vanguard Investment Strategy Group.

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*This monthly report represents the Vanguard house view as of 15 April 2020.



 

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