How long can markets party on like there is no tomorrow? The thing is – there always is and the hangover is bound to hurt, which is an apt metaphor as English pubs reopen today ! Markets need to prepare for the inevitable consequences of the big transition from 12 mixed years of fairly useless monetary experimentation to a future of fiscal pump-prime policies. What will it all mean for speculative bubbles, inflation and investment preservation?
The UK should be flying high on the success of the vaccination programme, government stimulus and the expectations of growth, but the negative news optics and an increasing sense of government mismanagement could unsettle recovery.
Seven factors to understand the market shift that’s roiling markets; bond yields and inflation, distortion, recovery, leverage, tech vs reality, exuberance, and value.