28 February 2021 | www.moneymarketing.co.za
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YOUR FEBRUARY ISSUE
‘Things will start to get better’ BY JANICE ROBERTS Editor, MoneyMarketing
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The global economy is improving as the world overcomes the COVID-19 pandemic, so things will start to get better,” says David Shapiro, Chief Global Equity Strategist at Sasfin Securities. Although it’ll be a shaky start as the world tussles with distributing the vaccine, once vaccines become widespread, economies will start to gather steam. “The pandemic has brought forward the future,” he adds. “The adoption of technology – such as video conferencing and online shopping during the lockdown – has fast tracked the use of technology to levels that weren’t expected for years. When the pandemic passes, the world will move to a new order, rather than looking back or trying to repair what we’ve come out of.”
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The crisis that hit the world in largely underestimated. “The damage 2020 wasn’t a financial one, but caused by the Trump administration rather a crisis that was imposed by has really shaken market sentiment, governments. “And for that reason, the and it’s going to take a long time obligation is still upon them to make and even a number of cycles for it to sure we get back to where we were.” bounce back, but at least it’s a start in While there has been recent the right direction.” speculation in financial markets that Biden has already said that he will the US Federal Reserve might start immediately take action to contain reducing its bond purchases as early the United States’ coronavirus crisis, as this year, Shapiro doesn’t believe with science dominating the this will happen. “Governments national response. Joining the Paris have learned from past mistakes not Agreement will also be a priority, as to reduce the levels of support too well as transforming America’s energy early… They will keep policies, but the rivalry businesses and workers between the US and THE PANDEMIC China will continue. on life support until well after the pandemic.” “Biden will remain HAS BROUGHT At its January policy tough on China,” Shapiro FORWARD THE says, “but he’ll seek a meeting, the Fed FUTURE indicated that it would multilateral approach rather risk erring on the with America’s allies side of removing accommodation too against China’s assertiveness – in other slowly than removing it too quickly, as words, he’ll talk to them about how heightened uncertainty surrounding they should approach the China issue.” the COVID-19 pandemic remains, and In terms of headlines this year, both the economy and labour market a troubling issue will be that of are far from a full recovery. Federal inequality. “A lot of vulnerable Reserve Chair Jerome Powell signalled countries and vulnerable workers that it is premature at this stage to are going to remain hardest hit by discuss rate lift-off or the tapering of the COVID-19 pandemic. A lot of QE asset purchases. jobs are concentrated among the less Against this backdrop, Shapiro skilled. Factory workers, waiters, believes there is room for equities “to construction workers – these go a lot higher”. He also believes that people can’t work from home, the importance of Joe Biden’s victory in while border restrictions will hurt the US presidential election has been migrant labour.”
While globally the pandemic has brought several themes to the fore, such as climate and health issues, cybersecurity and workplace diversity, Shapiro says he’s excited by the buzz that the world has seen around technology and the difference it’s going to make in people’s lives. People are now connected to the world by mobile phones and Zoom, with most finding that they are more productive. Continued on page 3
David Shapiro, Chief Global Equity Strategist, Sasfin Securities
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