The market is talking about a no-landing scenario – but should be watching what Central Banks are saying, and China’s position re Ukraine. The market remains vulnerable to recession and rising geopolitical tensions. They are very closely linked.
Nicola Sturgeon’s resignation as Scotland’s First Minister has triggered fervid speculation about votes going to Labour – another nail in Tory hopes of electoral recovery. Things seldom play out as expected – the Scots are a troublesome lot!
Inflation across the West looks to be more entrenched than markets believed – Higher for Longer. Maybe it’s time to accept it’s going to take time to fix, and look elsewhere for returns.
It’s time to stop kidding ourselves. Brexit promised much but has been a disaster. The economy is contracting, investment in growth has collapsed, and there are no signs of Brexit bonuses. Time for a reset.
It’s a big week for inflation data, but markets have caught a dose of common sense as the reality of higher for longer interest rates settles in. The question of why the market believes overly frothy narratives is fascinating – understanding why is critical to bet against them.
As traders rationalise what Central Bankers say about higher for longer rates, its time to reflect on just why markets and the real economy seem out of line and disconnected. The real issue is about how to reconnect growth and consumption, and that has implications for wages!
Rugby, Balloons and Employment Data – so much to consider this morning, but what this market needs a dose of common sense, understanding of central banks, and catharsis. Real interest rates and normalisation will provide solid foundations for real growth and recovery – not market froth!
The big story in the market has been the humbling of Indian conglomerate Adani. Who could have guessed? But the real issue isn’t that a company may have fooled the market over its value, but that the market never worked out how improbable the valuations were. Time to check up on risk management!
Blain’s Morning Porridge Feb 2nd 2023 – The End of [...]
Markets have a habit of getting over-excited. They get FOMO and become over hasty. Although the outlook is improving, there is certainly little to justify some of the more speculative hype dominating market moves. Time a bit of rational thinking and common sense – consider Tesla as an example of misplaced hopes.
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