Light at the end of the tunnel could be a train

After nearly a year of unexpected global economic and investment derailment, we are beginning to see a glimpse of hope from a new and stable US president and the approaching availability of one or more vaccines that will put an end to the pandemic.

This has led to euphoria in the investment world — global stock indices are at record highs while US long-term bond yields have risen; nevertheless, we are less sanguine.

In terms of the global economy, we believe that it will recover gradually if vaccines are approved. But confidence will not immediately return, since vaccines need to be approved, manufactured and distributed — all of which are complicated and take time. This means the global service sector will continue to underperform and may pull economic growth below its potential until vaccines are widely distributed, possibly…