2021 outlook 2021 outlook http://www.federatedinvestors.com/static/images/fhi/fed-hermes-logo-amp.png http://www.federatedinvestors.com/daf\images\insights\article\binoculars-coin-operated-small.jpg February 12 2021 February 16 2021

2021 outlook

A return to normalcy and opportunities.

Published February 16 2021
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Infographic published February 12, 2021. Title: 2021 outlook 2021. A return to normalcy and opportunities. What Federated Hermes expects for the year. As catalysts line up, we believe 2021 could be a potentially stellar year for risk assets. 2021 Forecast. GDP to rebound to 5.3%. The best year for United States economic growth since 1984. S&P 500 to reach 4,500 year-end target. Here comes the consumer. Pent-up demand should increase as vaccinations help Covid fears fade. 70% domestic economic activity attributed to consumer spending. Stuck at home, households have built up excess savings estimated at $1.5 trillion. 2021 equities. S&P 500 EPS projected to rise 20% in 2021. Despite early and rapid bear market, S&P finished 2020 up 16%. Other drivers: low bond yields and estimated $4.2 trillion available to invest. 2021 fixed income: It’s mostly about credit. 10-year Treasury could reach 1.5% or higher. Investment-grade, high-yield, emerging-market bonds should benefit as global economy improves. Information sources for this graphic included: Federated Hermes, 2021; Kiplinger, 2020; CNN, 2020. Stocks are subject to risks and fluctuate in value. Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices. Investment-grade securities are securities that are rated at least “BBB” or unrated securities of a comparable quality. Non-investment-grade securities are securities that are not rated at least “BBB” or unrated securities of a comparable quality. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower creditworthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default. High-yield, lower-rated securities generally entail greater market, credit/default and liquidity risks, and may be more volatile than investment grade securities. International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards. Prices of emerging markets securities can be significantly more volatile than the prices of securities in developed countries and currency risk and political risks are accentuated in emerging markets. Views are as of Feb. 12, 2021 and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector. Past performance is no guarantee of future results. Federated Advisory Services Company.