12 Feb 2021 2 min read

The CIO call: Winners and losers

In this month’s market update, we examined key themes that emerged in the Q4 company reporting season.

Yesterday I was joined on LGIM Talks by Madeleine King, Co-Head of Global Investment Grade Credit, and Gavin Launder, Senior Fund Manager, to discuss the market outlook in light of recent company earnings.

Key points covered in our discussion included:

Macro: We expect a synchronised, cyclical economic recovery in 2021 – an environment in which equities have historically outperformed

Premature removal of fiscal stimulus remains a material risk

Equities: We’ve seen a shift from balance-sheet concerns to a focus on earnings

Markets are looking past weak results from pandemic ‘losers’, e.g. leisure stocks, while ‘winners’ are being punished when they fail to deliver

Credit: A new wave of rating downgrades, albeit less severe than last year, may be on the horizon

Still, we’re close to peak leverage and some issuers may see upgrades

You can listen to the podcast on our website, Audioboom, Apple podcasts and Spotify.

Sonja Laud

Chief Investment Officer

Sonja is CIO of LGIM, having joined the business in January 2019 as Deputy CIO with responsibility for LGIM’s Solutions, Global Fixed Income, and Active Equity teams. Sonja joined from Fidelity International where she held the title of Head of Equity, responsible for the Global, Equity Income and UK Portfolio Managers as well as the Investment Director team.