July 8, 2021—There has been a very clear shift in investor sentiment in the past few weeks, manifested most clearly by an acute drop in long-term interest rates and a flattening of the yield curve, both in the U.S. and globally. What is much less clear is what is causing this shift that, until recently, has left equities unscathed but may now be broadening to look more like a classic risk-off market.
The calendar has officially hit the halfway mark, providing investors with an opportunity to take stock of their portfolios, evaluate what has worked as expected, and craft a plan for the second half of the year. Can risk assets continue their ascent? And within equities, does cyclical leadership have further to run? Our assessment of the economic environment leads us to respond “yes” to both questions.
Wilmington Trust Senior Economist Rhea Thomas and M&T Commercial Equipment Finance Group Manager of Direct Originations Scott Weissmann analyzed the 2020 trajectory of capital expenditures and what to expect for the rest of 2021.Last fall, M&T Bank’s John Wolfe, Commercial Equipment Finance, wrote about the importance of preserving capital during the economic uncertainties caused by the pandemic.