LQDB - Trying Not To Make Astrologists Look Good

2023-03-08 00:27:00 ET

Summary

• UK investors have bought into government bonds (particularly US) and have continued to sell down UK equities - of pretty much any flavour, despite a decent relative performance over the past year.
• Financing conditions are expected to remain tight, and businesses that have difficulty in passing on rising costs are more vulnerable to default.
• Reading the tea leaves of recent fund flows, it looks like investors are rebalancing portfolios after a turbulent year, with a bias towards higher grade bonds, implying low growth and stabilising, if not falling, inflation.

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