The coronavirus pandemic and subsequent lockdowns have intensified a number of threats to the global economy or have reversed long-term trends.
"This is a much different moment where these tectonic forces we were tracking on horizons we were thinking were a few years or a decade (away) have accelerated and become today issues," said Mike Pyle, managing director and global chief investment strategist at the BlackRock Investment Institute, New York. "Choices that investors and clients will be making are as much long-term allocation issues that will have to stand the test of (longer periods) of time … as shorter calls."
Issues such as deglobalization have been exacerbated by the COVID-19 crisis.
"The story of the past 25 years has been … of greater integration of financial markets, flow of people and workers around the world. And that looks to be very significantly challenged or even reversing in the period of time ahead," Mr. Pyle said.
Exhibit A of that is the U.S.-China relationship, which has been challenged the past several years. Regardless of who wins the U.S. presidential election in November, "we are likely to see a more competitive and in some ways more rivalrous relationship," Mr. Pyle said.
Along with the U.K.'s vote to leave the European Union — with the fast-approaching end of a transition period during which time the U.K. and the EU must reach an agreement — the U.S.-China spat shows movement toward a more fragmented global economy.
That means countries or regions will be "churning their own path, and as a result (we will) see a breakdown in economic and financial performance across the world" over the long term, Mr. Pyle said.