The media is full of China noise – does the rising tension mean it may become un-investible? The Chinese economy is very different, but recognisably similar. Investment into China boils down to how effectively a capitalist economy can succeed in the face of government diktat, bureaucracy, and intervention – and on that basis it’s a proceed with caution market.
The big event this week is how China celebrates 100 years of it’s Communist Party. What does it mean for markets, and where is China likely to go from here?
There are plenty of positive news stories emerging as the global economy reopens, but also an increasing number of real-world tangible threats emerging. The Pandemic has affected economies from top to bottom, and many issues won’t be resolved overnight. For markets the issues to consider aren’t just inflation or market bubbles, but how supply chain issues and instability could continue to impact sentiment.
Markets are priced for perfection in a very imperfect world. As stocks hit new highs, are the bulls or bears correct? Politics are likely to be the major influence on where we go next, but lurking around the next corner might just be inflation.
Seven factors to understand the market shift that’s roiling markets; bond yields and inflation, distortion, recovery, leverage, tech vs reality, exuberance, and value.
Central Banks face a critical ask; how to raise rates to avert fuelling the financial asset bubble without triggering market meltdown. And some brief thoughts on Scotland.
Blain’s Morning Porridge – April 15th 2020 “Shoebox in middle of road? Luxury… You had it lucky..” What is the…