2021 Outlook
Wall Street strategists appear bullish on the prospect of additional equity market gains in 2021, and QMA’s Global Multi-Asset Solutions team agrees with that judgment. Profit growth will likely be very strong next year, driven mainly by improvements in revenue growth and operating leverage (due to cost cutting during the downturn). Strong profit growth should drive equity returns next year even as stock market price/earnings multiples are high and likely to decline in 2021. Indeed, earnings revival should be the key driver for equity markets in 2021.