An interview with Michael Strobaek: What investors can expect after the pandemic.
The pandemic is posing a major challenge for the world economy and taking a heavy toll, especially on the service sector. According to Michael Strobaek, Global Chief Investment Officer at Credit Suisse, the pandemic also has an upside: attractive equities and low interest rates in a world after COVID-19.
Service sector severely afflicted by the pandemic
COVID-19 is creating global uncertainty and having a drastic effect on consumer behavior. This is evident above all in the service sector. After all, the hospitality industry, tourism included, has suffered a massive blow from the pandemic. Individual businesses may not survive another wave financially.
"Markets need to examine now what is happening in the US and what is yet to come in the way of government stimulus because they can't simply stand by and watch without injecting even more liquidity in the form of fiscal policy," says Michael Strobaek. The financial markets know that, too, and they are priming themselves for fiscal policy measures. Announcements of effective vaccines are also fueling hopes that the number of infections will be significantly lower than today by mid-2021. Michael Strobaek explains more in this interview.
Attractive equities as a result of the pandemic
The hope of a vaccine makes it easier to see what lies ahead for the immediate future. "The conclusion we draw regarding 2020 and the next five years is that we are entering a post-pandemic world," asserts Strobaek. Capital markets are expected to be dominated by low interest rates for the long term, which will push the relative returns in the direction of equities. On account of the pandemic, they have become comparatively more attractive. Watch the video with Michael Strobaek to learn how this development will affect the investors' strategic asset allocation and how the stimulus measures will impact the US dollar.