Market Perspectives: November 2020
27 October 2020 | Markets and economy
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
- In the U.S. expect a full-year 2020 GDP contraction of around –4% and 2021 GDP growth around 4%.
- China is on course to have fully recovered from the COVID-19 pandemic by year’s end.
- Inflation may experience some volatility in the near-to-medium term as a resumption in economic activity across sectors pushes prices higher.
- We continue to see the U.S. unemployment rate in a range of 7% to 9% by year’s end.
Asset class return outlooks
Our ten-year, annualized, nominal return projections, as of June 30, 2020, are shown below. Please note that the figures are based on a 1.0 point range around the rounded 50th percentile of the distribution of return outcomes for equities and a 0.5-point range around the rounded 50th percentile for fixed income.
These probabilistic return assumptions depend on current market conditions and, as such, may change over time.
IMPORTANT: The projections or 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 June 30, 2020. Results from the model may vary with each use and over time. For more information, see page 4.
Source: Vanguard Investment Strategy Group.
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