- The initial roaring rebound in markets from the initial Covid shock in Spring 2020 promised a quick return to “normal”. But stocks are still falling and yields are still rising, leaving investors with little in the way of a place to hide.
- Our response to the pandemic left the global economy with too much demand relative to a bruised supply side. The stubborn zero-Covid policy in China and the war in Ukraine have added insult to injury on this account.
- We have gone from a world in which below-target inflation allowed central banks to keep rates low, and even in some cases to pursue open-ended QE policies, to a world in which inflation is rising and threats to growth are mounting.
- Bearing in mind that the shift in macro regime has been painful for financial markets, is now the time to buy, regardless of whether the shift is more sustained? And should investors now get used to a world of higher inflation and presumably higher bond yields?
For further details see:
Time To Buy?