Every day, weekends included, a vast amount of news comes our way. I read mainstream news from the Uk and USA, using multiple online resources to get a balanced view and I also see ‘trade’ newsflows from investment companies and the specialist media such as Citywire. In addition, I watch specialist webinars and listen to some podcasts.
I hope this all postpones the onset of dementia!
Distilling down what multiple experts think is going to happen to investment markets and asset classes is a relatively automatic task for the NotHarry little grey cells. At the moment, I would say there are 2 distinct and very different schools of thought, both of which have proponents of good reputation and credibility.
The soft landing case
This goes along these lines:
Inflation is coming under control, economic growth has been braked but not killed off, corporates are still making money and central bankers will slow the pace of rate rises and in due course start cutting rates.
It is clear that the fixed income markets have been driven by something like this point of view since Octover or November 2022 and equity markets quickly followed along.
The Cassandras
Knowing they are never wrong and that you will regret not believing them, the other experts suggest that inflation will be much harder to constrain and central banks are quite prepared to force a recession to increase unemployment and frighten consumers. To do that they will keep putting up interest rates which will reverse recent foolishly optimistic gains in the fixed income markets and start the sort of cycle that can only be very bad news for equities.
You must be logged in to post a comment.