Digital technologies are helping businesses remain operational during the pandemic, prompting a reassessment of their long-term IT strategies. As macroeconomic conditions improve, this will benefit sectors such as cloud infrastructure services, cloud-based software, semiconductors and IT services. But IT vendors with meaningful exposures to on-premise hardware and software will be challenged, as will printer and printer-services companies.

Economic activity remains uneven and consumption is edging toward average levels but slowing. Consumers have yet to spend the cash they saved during the coronavirus lockdowns.

Overall credit effects of COVID-19 have been most acute for lower-quality debt issuers in consumer-sensitive sectors and for those with weak liquidity. Recovery over the next year will likely vary, with improvement the slowest for sectors already bearing the brunt of pandemic-induced business disruption.

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