As economies reopen from COVID-19 lockdowns, there have been fundamental shifts to daily life and work, as well as the investment landscape. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, Scott Glasser, Chief Investment Officer of ClearBridge Investments, and Dave Gilbert, Chief Investment Officer of Clarion Partners, discuss the changes they are seeing.

Katie Klingensmith: Thank you all for joining us. Let’s start out with Dr. Sonal Desai and a Franklin Templeton–Gallup study analyzing the course of economic recovery from COVID-19 in the US. Sonal, tell us about this study and some of its key initial findings.

Sonal Desai: Thanks Katie. We launched a survey—the first of its kind really in terms of scale—with Gallup to try and understand how consumers were in fact thinking about their behaviors. This is a survey, which, it’s a pulse, so it happens every single month for the period of six months. And we’ve got some pretty interesting results already. What we found was that over the first couple of months as, we, of course saw consumer confidence in their desire to participate in the economy, it collapsed in the first couple of months of COVID. Then we had a series of reopenings, it started picking up again. And then of course, we got whatever you want to call it—continuation, the second wave—we got that happening over the course of July and August. And so we were very curious and concerned about whether we would see consumers desire to take part in the economy collapse again. And instead what we saw was it actually stabilized. People have increased their level of saving. There’s absolutely no doubt about it. And I think one concern we have about people having increased their savings is that then they’re not consuming.

The good news here is they’re not using all their savings to pay down debt. It’s like a buffer, which is sitting there waiting to be deployed. This, I think is something to be optimistic about. It’s a good, good result. There is huge support for additional government fiscal support in this enormously polarized time politically. It doesn’t matter what political stripes you wear. Everyone is in favor of additional support, cynically, you might think “well, they would be.” But on the other hand, people prefer to actually go back to work than to get enhanced unemployment benefits, in the sense that, if they had to choose between going back to work and taking increases in unemployment benefits, they actually prefer to go back to work. This I think is good.