One can hardly prognosticate about matters of the economy and financial markets without acknowledging the role the vaccination campaign is having on consumer and business activity. Certainly, the news on that front is encouraging, and evidence of conditions returning to normal abound.


  • A vibrant economic expansion is occurring. Its momentum suggests it should carry well beyond this year, which is boosting confidence among consumers and businesses alike.
  • Rapid profit growth estimates over the next several years, if realized, support the rationale that stocks should move in a directionally commensurate fashion.
  • European equities, and commodities, have the potential to shine, as viral inoculation success leads to improved global economic activity. Oil, industrial, and precious metals offer appeal.
  • Global economic uncertainty has receded, but the Biden Administration’s approach to its adversaries may be challenged at times, creating market-disrupting pressure points.
  • Longer-term interest rates increased early in the year, but the “transitory” inflation narrative Fed officials advocated took hold in the market’s mind and they have been stable since.
  • We expect interest rates to be slightly higher by year’s end, with the yield curve likely “bear flattening,” led by higher short-to-intermediate-term interest rates.
  • Investment-grade and high-yield corporate bonds should continue to perform well relative to Treasury counterparts, aided by strong corporate profitability and supportive risk appetite.
  • Municipal markets are likely to outperform in a rising interest rate environment, as demand from high-net-worth investors continues to meet with, thus far, negative net issuance.

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About the authors

Mark Luschini

Chief Investment Strategist, President and Chief Investment Officer, Janney Capital Management

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Guy LeBas

Director, Custom Fixed Income Solutions

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