Page 3 - ISQ July 2021

JULY 2021

expectations. With earnings growth expected to surge more than mid-2022. Demand from South Asia is critical to reaching the
60% during the second quarter and maintain a vigorous trend into pre-pandemic peak of 100 million barrels per day. OPEC+ (includes
2022, equities should grind higher, albeit at a slower pace than Russia) continues to exercise discipline in adjusting supply levels,
over the last year. We revised our 2021 year-end target for the S&P but investors should consider the potential for U.S. sanctions to be
500 to 4,400 and expect it to rise to 4,600 by year-end 2022. lifted on Iranian oil. Therefore, we are only slightly raising our
A modest corporate tax increase to 25% (from the current 21%) year-end target for West Texas Intermediate to $75 from $70 per
shouldn’t deter a string of positive quarterly earnings. While our barrel. Further supporting commodities is our expectation that the
bias remains more US-centric with a focus on U.S. large-cap and U.S. dollar will weaken slightly by year end versus major currencies
small-cap stocks, it’s possible an acceleration in reopenings in like the euro (year-end target: 1.25 EURO/$).
other parts of the world (like Europe) could lead to potential short- Despite our optimistic message, there is no lack of potential Risk®:
term trading opportunities. Our growth versus value positioning is COVID variants, geopolitical tensions, and politics. However,
more of a ‘draw’ as our preference for big-cap Technology and taking on undue risk to your portfolio is Taboo®. Just like these
Consumer Discretionary is offset by our preference for Financials, classic games, the rules for investing remain timeless — adhere to
Energy and Industrials.
your asset allocation strategy, periodically review your goals and
So far this year it’s been Candy Land® for commodity investors, with objectives, don’t let emotion dictate your investment decisions,
gradual, sustainable reopenings across the globe leaving sellers and, of course, work with your advisor. A successful investing team
vying for key inputs to satisfy pent-up demand. Investors found can make the real Game of Life ® even more enjoyable! Best wishes
‘King Kandy’ as lumber and industrial metals raced to or near for a wonderful summer!
record highs due to bottlenecks. These price increases should sub-
side as supply constraints dissipate. In terms of global oil demand,
the recovery in North America, China, and Europe has been sub-
stantially realised, but still-intact COVID restrictions leave much of
South Asia, with its 1.4 billion people, on the dreaded ‘licorice
space’ – the sticky spot that slows down the game. We anticipate it Lawrence V. Adam, III, CFA, CIMA®, CFP®

won’t be all ‘lollipops and rainbows’ for global oil demand until Chief Investment Officer, Raymond James

Investment Strategy Committee Members

Lawrence V. Adam, III, CFA, CIMA®, CFP® – Committee President, Joey Madere, CFA Senior Portfolio Analyst, Equity Portfolio & Technical Strategy
Chief Investment Officer, Raymond James
Ed Mills Managing Director, Washington Policy Analyst, Equity Research
Chris Bailey European Strategist, Investment Services Ltd.*
Pavel Molchanov Director, Energy Analyst, Equity Research
Scott J. Brown, PhD Chief Economist, Raymond James
James C. Camp, CFA Managing Director, Strategic Income, Tracey Manzi, CFA Senior Investment Strategist, Investment Strategy
Eagle Asset Management*
Doug Drabik Managing Director, Fixed Income Research Chief Investment Office
J. Michael Gibbs Managing Director, Equity Portfolio & Technical Strategy Anne B. Platt, AWMA®, AIF®, RICP® – Committee Chair, Vice President,
Investment Strategy
Nick Goetze Managing Director, Fixed Income Solutions
Giampiero Fuentes Investment Strategy Manager, Investment Strategy
Nicholas Lacy, CFA Chief Portfolio Strategist, Asset Management Services
Kailey Bodine Investment Strategy Analyst, Investment Strategy

*An affiliate of Raymond James & Associates, Inc., and Raymond James Financial Services, Inc.
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