Capital Markets Winter 2021

Key Observations and Themes

Road to Recovery and Beyond We detail our view of the powerful drivers of the economic and corporate earnings recovery, as well as the opportunities that the expansion presents.

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I

Enduring Themes Secular investment trends may transcend economic volatility, politics, and central bank actions, producing compelling investment opportunities over the long term.

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II

Lending vs. Owning With interest rates at historically low levels, stocks look attractive relative to bonds. We believe equities will outperform fixed income over the long term.

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III

Valuation While elevated relative to history using traditional metrics, equity valuation looks more attractive after accounting for low interest rates and changing business models.

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IV

Style Wars Powerful structural forces have caused Growth to diverge from Value. Shifts in leadership are likely but the long-term trend should stay intact, in our view.

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V

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