The winding road to recovery

The market movements of recent weeks are a timely reminder of the importance of the main near-term risks – coronavirus cases rising in major economies as winter approaches, and uncertainty about the forthcoming US election. Both could continue to weigh on risky assets in the near term. However, we still suspect that the main narrative over the next couple of years will be one of progress in containing the virus, accompanied by a further recovery in the global economy. In our view, those circumstances, combined with the likely policy backdrop, would be consistent with four key themes for asset allocation.