June 10, 2021 June QuickPoll: Investors Focused on Economy, Not COVID
The economy, interest rates and central bank policies are at the top of investors’ list of concerns, according to the latest Marquee QuickPoll survey of 868 institutional investor clients. Here are the key findings:
All eyes on the economy and central banks. After dominating investors’ focus for months, COVID-19 data and vaccine rollouts are now a distant third (14%) in the lineup of most-watched events for the month, following U.S. economic data (38%) and central bank statements (34%). In other words, investors are back to their usual worries and becoming increasingly sensitive to any signs of tapering, just as they were the last time the Fed began to raise rates.
A more dovish Fed. Compared to last month, investors have lowered their expectations for higher rates in the short term. The recent weaker-than-expected jobs data may have brought enough ammo for the Fed not to taper imminently, thus capping any potential move higher in real rates.
European reopening and the commodities supercycle are still the two clearest themes in play. This month was one of the few on record where investors picked the SX5E above the SPX (which happened only seven times in the previous six years), including a surprising ~20% of participants in the Americas and Asia. With Europe well positioned to benefit from a growth acceleration (European indices are significantly more sensitive to growth than American ones, where secular growth has a much bigger weight) and positioning among institutional investors seemingly underweight, all the ingredients seem to be in place for continued outperformance of European equities.
