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The Horizon–Q2 Update

Viewing Market Opportunities through the Lens of Demographics

Woman looking at the horizon

The Horizon is a quarterly report from our Chief Investment Office, exclusive to Merrill Private Wealth Management, intended to help high net-worth clients pursue their personal goals by addressing timely topics in areas such as macroeconomic trends, long-term investment themes, market dynamics, asset allocation and portfolio strategy as well as wealth structuring, planning and transfer.

“The rise and fall of generations has had outsized impact on equity markets historically, and it is our view that demographics will continue to impact global economies moving forward”


—Emily Avioli,
Assistant Vice President and Investment Strategist

As recovery from the 2020 exogenous bear market continues, it is our view that global equities should continue to climb higher. We have long said that accommodative monetary policy, higher levels of economic growth and corporate cash flows, innovation and productivity, and manufacturing revival will be the pillars for long-term growth. However, in addition to these, demographic trends are likely to keep the secular bull running in the U.S. and abroad. The rise and fall of generations has had outsized impact on equity markets historically, and it is our view that demographics will continue to impact global economies moving forward.

“The maturing of the Millennial cohort into the middle-age category should keep the secular bull market in U.S. equities running over the next decade plus. In the long run, parts of the Emerging Markets universe such as consumer, healthcare and technology areas will likely benefit from the rise of the Gen. Z cohort, as they invest more of their rising incomes and boost future consumption trends.”


—Niladri Mukherjee,
Managing Director and Head of CIO Portfolio Strategy

The Millennial cohort entering its peak years of consumption and investing should add to the U.S. equity uptrend by supporting growth, corporate earnings and valuations. We are already seeing evidence of risk-assuming behavior through the increased participation of retail investors in the equity market and a boom in the housing market. Looking further out, consumer-facing companies in emerging markets are likely to reap benefits from the rise of Gen-Z.

Read the full report