2020 witnessed once-in-a-century swings in markets: Morgan Stanley

Mumbai: Global economies and the capital markets across the world saw “once in a century” swings but 2021, is all set to bring in normalcy, a Morgan Stanley research said Friday.

Global equities and economies saw a drastic fall this year as Covid pandemic and lockdowns implemented in many large economies including India.

Next year, is set to see the recovery. “Trust the recovery, and the post-recession playbook,” the research said.

The economic swings in some way were similar to 2010 the research pointed out. “2010 followed a terrible recession and an aggressive policy response. It dawned with a still-weak economy, the Fed at the zero lower bound and a significant outperformance of ‘liquid’ indices such as CDX IG and the S&P 500 relative to equity volatility or securitized credit. It saw a major growth scare and a 15%+ correction in global equities. But 2010 was ultimately a solid, above-average year for returns,” it added.

The research said that across the world equities are set to grow in the coming years and investors need to trust the process. “Across regions, we see 25-30% EPS (earning per share) growth and double-digit total returns through end-2021. We expect US small-caps to outperform large-caps,” the research said.