As we come to the close of 2020, many investors find themselves wondering what lies ahead for the remainder of the year. While the stock market has seen record breaking highs during the course of the year, the overall landscape of the equities market is far from certain. In order to better understand the state of equities at the end of the year, we need to take into account a variety of factors.
For starters, the global economy is still reeling from the effects of the COVID-19 pandemic. Many countries have been implementing stimulus packages in an effort to revive their struggling economies, but the global economic picture remains uncertain. Moreover, there is the looming prospect of further economic disruption if a new spike in cases or increase in hospitalizations occurs. All of this makes it difficult for equity investors to gauge the state of the market’s outlook.
Second, there is the presidential election in the United States. This event will likely have a major impact on the stock markets of the country. The Democratic and Republican candidates present starkly different economic policies, and investors must consider how the outcome will shape the economic landscape and the direction of equities.
Finally, there is the potential of a wave of merger and acquisition activity. This activity could be sparked by the increase in corporate debt and cash accumulating on corporate balance sheets during the pandemic. This could provide equity investors with opportunities to capitalize on potential long-term upside in the share price of companies involved in such activity.
In conclusion, the equities market is a complex and ever-changing landscape. As we move into the end of the year, investors should consider the macroeconomic environment, the potential of a new spike in COVID-19 cases, the outcome of the presidential election, and the possibility of merger and acquisition activity. All of these factors can provide insight into what lies ahead and help investors optimize their portfolios for potential future gains.
