 Indicators point to a weaker and more divergent start to the year  US fiscal stimulus, fading second-wave bounce expected in Mar/Apr  G-3 central bank low-for-long strategies gain modest traction  Next week: Wide 4Q GDP gaps: US strength vs. European contractions A sense of where you are Our forecast for boomy global growth this year incorporates a weak start followed by a sharp acceleration into next quarter. Such an outlook is naturally accompanied by the contrast between exuberant aspirations and current disappointments.

This gap has widened on a number of fronts in recent weeks:  A pernicious second wave. Our expectations that the COVID-19 second wave would be arrested early contrasts with evidence of sustained elevated case counts and a broadening of the outbreak to China and LatAm. Europe remains at the epicenter. Restrictions are being intensified and extended while supply and distribution constraints are slowing the roll-out of vaccines.

With readings on our Google activity index (GAI) now available past the holiday season, the virus appears to have depressed global mobility materially relative to mid-December levels (Figure 1).

 Tech charges ahead, consumers sour. As robust tech demand and a broader restocking upturn remain in place, the recovery in industrial activity continues apace. But the pullback in mobility is weighing on consumers who appear to have slowed by more than expected at year-end. On the heels of November’s 1.3% drop in global retail sales volumes, December readings for the US, China, and the UK disappointed. Indicators on services spending are limited but the available evidence—from US employment, UK monthly GDP, and this week’s DM flash PMIs—points to a building servicesector drag as we turn toward the new year (Figure 2).

 Diverging policy paths. Forecasts for additional DM fiscal stimulus led by the US have been a key driver of upward global growth revisions. While US stimulus checks were sent out earlier this month, we have yet to see a positive response in our Chase Card data. At the same, there are signs that China is pulling back on credit and fiscal supports earlier than expected in response to its impressive 4Q20 GDP performance.