This is a piece via AMP in Australia (Australia's largest fund manager)
In brief, the positives:
- second wave of new coronavirus cases in developed countries has been far less deadly than the first
- there has been good progress in terms of vaccines and treatments
- easy monetary and fiscal policy is continuing to support economies, incomes and jobs
- the fall in the “safe haven” US dollar and rising commodity prices (with metal prices back to their pre-coronavirus levels) is a sign of global reflation and recovery
- a range of economic indicators have seen a Deep V rebound starting in China and then in developed countries
- the plunge in interest rates and bond yields have increased the present value of shares, which explains why PE ratios are so high. So shares remain attractive
- investors are still cautious which is positive from a contrarian perspective
And ... the negatives:
- coronavirus has yet to come under control globally
- this is occurring at a time of a massive hit to economic activity and profits, and very high underlying unemployment
- the recovery going forward may be slow as some things will take longer to recover
- we are now in a seasonally weak time of the year for shares
- the run up to the US election has the potential to drive increased share market volatility
- shares are expensive on traditional metrics
