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.
Last night’s US local elections threw out some interesting signals as to where gridlock, polarisation and the apparent decay of American Democracy are headed next. Its maybe not all as bad as we fear, but the outlook remains risky!
Nothing to worry about… except Pandemic, Bonds, Inflation or Deflation, Record Container Prices and Geopolitics? Is there any chance of compromise and a deal on the US infrastructure package everyone agrees is necessary – or will it sink into the partisan swamp? And Cathie Wood talks up her investment strategies – but what’s the substance behind the leading Zeitgeist Investor?
The world looks poised on the edge of a synchronous recovery on pandemic recovery, climate-change, renewables and infrastructure investments. It will fuel a massive commodities supercycle, but is not without danger in terms of currency confidence and debt risks. A key proxy will be copper – which could rally strongly, yet still looks cheap in dollar terms. However, the growing sense of fractured political polarisation and gridlock in the US suggests substantial dollar depreciation.