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Global Equities Move Higher Over Next Year: JPMorgan PB

Nov.17 -- Grace Peters, head of European equity strategy at JPMorgan Private Bank, discusses global equities and her investment strategy. She speaks on “Bloomberg Markets: European Open.”

Video Transcript

ANNA EDWARDS: I wonder if you could give us the context or the size and scope of the significance of the vaccine news we've had over the last couple of weeks from Pfizer, Beyondtech, and now from Moderna as well. Is this something that prompts a whole hearted rethink of your exposure on European equity, or is it just tweaking at the edges? What is the size and scope of this view?

GRACE PETERS: So we think that we're in a recovery phase across global equity markets. Global equities will move higher over the next 12 months. But as they go up, you will see this broadening out of leadership. Leadership thus far has been extremely concentrated around growth equities, and we do think there's room for more cyclicals to also participate in the rally.

And this is something we've been saying for a few months, actually. We've been advising that clients balance portfolio adding cyclicality to compliment [INAUDIBLE] structural growth. And news around the vaccine and indeed greater clarity post the US election also does lend itself to the idea of a bridge to more normal economic growth, economic recovery, and slightly higher bond yields that also help equities and help this more cyclical rotation.

But we don't think it's about, you know, cutting growth altogether. Growth and technology around digital transformation is still a key part of our conviction. But it is an acknowledgment that COVID has changed the investment landscape. There are new areas of growth that you can invest in, particularly those with an environmental tilt. And there's also parts of the economy that have been very heavily impacted by mobility restrictions that we've seen and may still be upcoming in some regions as well. And some of those parts of the market do look oversold when you start to bridge towards normality.