Optimism is of the essence on the financial markets as 2021 gets underway. Investors are anticipating an economic recovery with a rebound in company earnings, all the while expecting the central banks to continue their generosity and interest rates to remain very low. - Guy Wagner - February 16th 2021

Such a combination would provide a favourable context for equity prices to keep on rising. But these factors also indicate the main risks facing the equity markets:

  • the economic recovery is not on track or at least disappoints;
  • the central banks change course and start to tighten their monetary policy;
  • the central banks remain generous but bond yields rise.

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