QUESTION OF THE WEEK

Which market trends will reverse?

Every other week, we ask for your thoughts on a top question our portfolio managers and strategists are debating. We share the final poll results and insights.

    Which major long-term trend do you see reversing in 2021?

      Poll answer choices Responses
      Inflation is dead 40.54%
      Tech over financials and energy 24.32%
      U.S. stocks outperform 21.62%
      Lower rates for longer 13.51%

      Source: Blackrock Investment Institute, with data from SurveyMonkey. Note: Data does not include results from BlackRock social media polls.

      Poll round-up

      We asked and you responded to our latest poll: 40.54% voted that “inflation is dead” was the market trend they saw as most likely to reverse in 2021. This was followed by 24.32% for “tech over financials.” The trend seen as least likely to reverse was “lower rates for longer” with nearly 14% of the vote.

      This was in line with how BlackRock portfolio managers answered the question of the week. Around 40% saw subdued inflation as the most likely long-held trend to reverse this year. An end to U.S. leadership of the global equity rally and an outperformance of financial and energy over tech for the first time in a decade were the other popular responses. 

      Voices in the room

      One multi-asset investor made the case for non-U.S. equities to outperform in 2021. “A significant fiscal impulse, deeply negative rates, pent-up-demand and a savings surplus are likely to lead to a significant acceleration in global GDP,” he argued. “This should provide a supportive backdrop for cyclical equities, which enjoy a heavier weighting in non-U.S. equity markets.”

      A member of the Income and value team saw inflation as alive and kicking – saying, we will see an “inflation in everything” environment – from natural gas, crops and livestock to prices of clean energy-related materials. Another voice in the room took a longer-term view based on the book, The Great Demographic Reversal by Charles Goodhart and Manoj Pradhan. The authors argue that the world is about to enter a super-cycle of high inflation and rising rates – but less inequality.

      BII has long flagged the potential for rising inflation in the medium term, and markets have awoken to this risk in recent weeks.  BII’s new nominal investment theme points to a muted response of nominal yields to rising inflation – underpinning its pro-risk stance. The BlackRock Inflation GPS, which provides an outlook for core inflation, is uniformly ahead of consensus across economies. 

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