On the Markets

 

WisdomTree continues to listen closely to the advisor community and create new resources for advisors as well as all investors to provide the guidance they need to maneuver the daily market changes.

Keep an eye on the situation as it unfolds with our latest news.

2021 Economic and Market Outlook

So far, 2021 has been a year of promising growth after unexpected change around the world. As we attempt to ignore market noise as much as possible, will the substantial “known unknowns” prevail as we head into the latter half of 2021?

 

Read the Market Outlook

Read Our Actionable Ideas

DPD View

WisdomTree Office Hours

Advisors can now join our thought leaders as they discuss current markets and actionable investment solutions. This small-setting format allows for advisors to ask questions and enter into a dialogue, leveraging our thought leadership to navigate the market uncertainty. The schedule is updated weekly.

Thought Leadership


Nasdaq Trade Talks ETFs in 2020 and Outlook for 2021
Anita Rausch, Head of Capital Markets at WisdomTree, joins Jill Malandrino, Global Markets Reporter at Nasdaq, on Trade Talks, to discuss lessons learned with ETFs in 2020 and to provide an outlook for 2021.

Commentaries from Our Thought Leaders

For more daily insights from our thought leaders, from macro commentary to helpful tips on trading ETFs in times of high volatility, visit our blog.

Actionable Ideas for 2021

When focusing on what we believe are the primary market indicators, we conclude 2021 will enjoy a generally positive economic and market environment.

Given our cautiously optimistic view of the market environment throughout 2021, we believe the following themes will be prevalent and there are actionable ideas to capitalize on them should you agree with our position.

Quality & Income

Most, if not all, of our dividend mandates are currently generating key quality metrics—return on equity (ROE) and return on assets (ROA)—in excess of core beta benchmarks. It is a fascinating development because these are value-oriented mandates that are trading at considerable discounts to cap-weighted indexes.

Actionable Investing Ideas:

Cyclical Rotation

After a 14+ year run that witnessed growth stocks consistently beat value stocks, resulting in a large valuation gap between the two, a rotation has been clear ever since the original vaccine announcement in November 2020. Value stocks, which were hit hardest during the COVID-19 crisis, had the most to gain from reopening. The value dispersion in the international small-cap markets is especially wide, so we suggest allocating to the asset class in both developed and emerging markets.

Actionable Investing Ideas:

Emerging Markets

We anticipate downside risk for the U.S. dollar. In equities, our fraught geopolitical environment continues to set a backdrop for the favorability of our Indexes that exclude state-owned enterprises (SOEs). One recent example is Biden’s building on Trump’s list of Chinese companies with close ties to the People’s Liberation Army. Such firms have a clock ticking on them, whereby U.S. investors must divest. Logic dictates that the list, currently comprised of dozens of companies, will grow before it shrinks.

Actionable Investing Ideas:

Disruptive Growth

The COVID-19 pandemic has compressed trends that usually take decades into about a year. Examples include cloud computing but also a heightened focus on areas such as genetics and biotechnology.

Actionable Investing Ideas:

Inflation

A long-awaited bull market in commodities may be in tow. While deep federal budget deficits and rampant money supply expansion are two forces driving it, they are not the only catalysts for more upside. The push toward alternative energy will require a massive increase in demand for base metals such as copper. Additionally, there is a trend toward shareholder activists pushing oil companies away from capital expenditure, as evidenced by the three board directors put on ExxonMobil by Engine No. 1, which holds 0.02% of the equity. Tie that in with the recent ruling from a judge in The Hague that Royal Dutch Shell must reduce carbon emissions 45% by 2030, and we have a setup for purposeful supply reductions without attendant demand destruction. What we are seeing in oil now, with Brent crude north of $70, may be an early stage of a coming energy crisis.

Actionable Investing Ideas:

Basis Points Podcast with Kevin Flanagan