The online publisher Visual Capitalist is a good place to start for investors and market analysts looking for the big picture. Its January 5, 2021, “Official Bingo Card” highlights what experts see in economic trends for the year ahead. The 25-squares of pithy predictions provide an interesting aerial view for both the layperson in the volatile art of predicting what our economy will do and how the market will react.
Summarized below are the most interesting 5 from the standpoint of the average investor:
1. COVID-19 Recovery Won’t Occur Early in 2021
We are in the midst of a complex pandemic. Public health experts are already grappling with managing mass inoculations, lowering expectations that the vaccine will result in a quick recovery. The general consensus on when the world will return to its pre-pandemic economic activity ranges from summer of 2021 to early 2022—except for China.
2. China Will Have a Strong 2021
As the world’s most populous country having left the COVID-19 in its rearview mirror, China is back to business as usual. Estimates for its 2021 GDP growth range from a median of 8.4% to a full-year growth of 10.2%.
3. Resistance to Remote Working Arrangements Has Crumbled
As the work-from-home experiment has reached its first anniversary, its feasibility is a proven factor, even among firms that were stubbornly resistant. A great re-thinking is underway, and during 2021 millions of companies “will begin reengineering everything from physical offices to digital infrastructure” with “broad implications on the economy and our culture.”
4. Health of Workers Will be Taken More Seriously
It’s no secret that the pandemic has taken a toll on everyone’s mental health this past year. Many companies are seeking ways “to support employees from a health and wellness standpoint.” As workers begin their physical return to the office and commercial leases expire, the prediction is that employee wellness and safety will factor into evaluating worker needs and a resulting change in office redesign.
5. A Potpourri of Predictions from the “Official Bingo Card”:
The following are one-liners from the 2021 predictions:
- Bitcoin will hit the $50,000 mark.
- U.S. cities will get creative with space and mobility.
- Movie theaters will begin their next act of in-theater and on-line premieres.
- The U.S. housing market will remain strong.
- Mortgage rates will remain low and stable.
- Global GDP growth will rise by 5-6%.
- The U.S. national debt and deficits will continue to grow.
Finally, to answer the question, “What does Wall Street Expect?” — a Bloomberg report provides a consensus of market outlooks from the world’s biggest banks and investment firms. “Caveats abound,” says author Sam Potter, “but the consensus is that after the Covid-spurred crash the vaccine is setting the stage for a new period of economic growth.”
One typical prognostication is from JPMorgan Asset Management. After the upcoming winter slowdown, “widespread vaccination should allow U.S. growth to surge later in 2021.” This will precipitate “a relatively fast rebound from a deep recession.” On the other hand, recovery in the GDP and jobs “are on different timetables.”