China will remain the driver of global growth as the West continues to slide. The economy is reopening swiftly, raising increased fears of de-dollarisation. It’s easy to get emotional, but the reality is its happening, get used to it, and figure out the outcomes. They may surprise you..
There is nothing as dangerous for markets as directionless markets and a deep threat board. Place your chips accordingly…
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.
Around the globe everyone thinks inflation is beaten. It may well be, but the consequences will persist. Interest rates may not “pivot” the way market optimists hope, with profound implications for equities and bonds. We are into a new market cycle of normalised rates and corporate fundamentals. All-in-all, that’s a good thing for growth!
Christmas is coming, but plenty still to think about in terms of markets; from the lessons on Covid re-opening in China, what Tesla’s shareprice tells about the resurgence of common sense, and the prospects of 2 years of dither into the very necessary general election the UK needs to move forward!
Jerome Powell signalled a slow-down in interest rate hikes – and markets loved it. But did he just make a long-term mistake by not decisively signalling the end of the era of monetary and market distortion? There are lessons to be learnt, not least being the role of inflation in a buoyant economy.
After some tumultuous weeks in global markets, where do we go from here in terms of the dollar, inflation, energy, China? It’s all terribly complex, but probably good news for some and bad for others. The UK is likely on the loser list.
Last week saw a succession of fundamental shifts in how the global economy is working: inflation, China’s reopening, western politics, crypto, Climate Change, Tech stocks, and in Ukraine. These all have significant potential market implications.
US Midterms were a mild win for Republicans, a loss for Democrats, a Big Win for Democracy and a Massive Defeat for Donald Trump. That’s all great news for markets and the global economy.
Halloween is a great time to be scared about markets. They are inconsistent, confused and uncertain, but the reality is even rising interest rates, inflation and trade wars sort themselves out - eventually. The real danger is how much worse bad politics and make a scary situation absolutely frightful.
