Pretty bleak headlines this morning – sentiment is crashing. Excellent! In crisis there is opportunity. Where and what are they? For clues, look to how the authorities can address the looming crisis!
Everyone is balancing inflation, economic numbers and this week’s Jackson Hole Central Bank smooze-a-thon to guess markets. What if we are looking at the wrong things – and economic divergence, income and wealth inequality and unravelling domestic politics are the critical factors?
The outlook for the UK looks increasingly grim. There are few reasons to hope a new government can reverse the mounting consumer fears, stagflation and the growing sense of decline.
Winter is coming as soaring gas prices are set to bite across Europe. Putin’s energy insecurity strategy has proved his major success and could yet win him the Ukraine War. Stagflation is nailed on it Europe.
So many contradictions abound in current markets, but it’s possible to cut through the noise to discern some probable direction. The old adage of being confident while others are fearful looks one way to approach the current confusion.
There are lots of outlooks and scenarios on the inflation threat: what if its longer and turns stagflationary, and just how much more destabilising would the fraxious global economy become?
Despite US inflation hitting a 40 year high, US growth stocks rallied – reflecting the belief inflation and recession will be short and sharp. It’s a fair bet – but go back into growth stocks eyes-wide-open, and don’t be fooled by the most dangerous myth surrounding Tech – Personalities!
The world is watching for signs confirming global recession, so naturally markets have rallied (!). Political instability is resolved to be replaced with some bleak truths and spending choices. So.. steady at the wheel, nothing to worry about then?
The Fed just aggressively hiked 75 bp in the midst of the first major correction since 2009, making clear the game has changed, and we’re into a whole new cycle. While the market correction remains ongoing, when it flips, it will flip swiftly. Already there are positive signals to be seen – but only if you look outside the box.
April 2022 will go down in market history as the month it all became obvious.. But what? That the global economy is in need of repair, markets are overly euphoric and consumers can’t consume when they are broke.
